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Expand chart
Data: U.S. Bureau of Economic Analysis; Chart: Axios Visuals

A major reason banks were rolling in so much dough last quarter is the explosive growth of the U.S. personal savings rate, which hit the highest mark since the 1980s in March and a historic 33% rate in April.

By the numbers: The rate of savings as a percentage of disposable income was by far the highest since the Bureau of Economic Analysis started tracking it in the 1960s.

  • The savings rate has jumped to almost double the previous record of 17.3% in May 1975.
  • Spending declined by a record 13.6% in April.

Yes, but: There is an aspect of “forced savings,” Diane Swonk, chief economist at Grant Thornton, told CNBC

  • “There’s not much opportunity for many people to go out and spend money," Megan Greene, a senior fellow at Harvard Kennedy School, told CNBC.
  • “With shops all closed and everybody locked up, the ‘shopportunities’ have dried up. That speaks to a kind of demand shock.”

Yes, but, but: Many economists have worried about the coronavirus pandemic leading to a more structural change in saving and spending habits leading to a permanently higher savings rate.

  • During the 1970s, the savings rate was consistently around 14%.

The big picture: The U.S. economy is much more dependent on consumer spending than it has been historically, and that is especially true now.

  • Businesses are looking to bounce back from losses suffered during government-imposed lockdowns to contain the COVID-19 outbreak and will need savings rates to fall back quickly and for consumers to return to previous spending patterns.

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Aug 13, 2020 - Economy & Business

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Illustration: Aïda Amer/Axios

If you don't know how broken something is, you're not going to be able to fix it.

  • That's the crisis facing policymakers trying to repair a devastated economy without knowing the true degree to which the pandemic has hurt the country.

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A look at how philanthropy is evolving (and why Dolly Parton deserves a Medal of Freedom).

Updated 6 hours ago - Politics & Policy

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  1. Politics: Fauci says he accepted Biden's offer to be chief medical adviser "on the spot" — The recovery needs rocket fuel.
  2. Economy: U.S. economy adds 245,000 jobs in November as recovery slows — America's hidden depression: K-shaped recovery threatens Biden administration.
  3. Education: Devos extends federal student loan relief to Jan. 31
  4. States: New Mexico to allow hospitals to ration coronavirus medical care
  5. Vaccine: What vaccine trials still need to do.
  6. World: UN warns "2021 is literally going to be catastrophic"
  7. 🎧 Podcast: Former FDA chief Rob Califf on the vaccine approval process.