The pandemic has yet to be defeated, but — after an extremely difficult year defined by a deadly disease, a weakened economy and debilitating uncertainty around both — the U.S. appears to be turning the page, thanks to a swift vaccine rollout and government-issued financial relief.
Household savings in the first quarter of this year topped 20% of disposable income in the U.S., compared to the country's typical savings ratio of closer to 9%, and net wealth among U.S. households "increased notably over the course of the pandemic," according to Cailin Birch, global economist at The Economist Intelligence Unit.
"All of this suggests that the economy is headed for a strong recovery in 2021," she said by email.
...The pandemic has introduced new uncertainty
The pandemic has also initiated or sped up trends like e-commerce growth, the decline of the mall, the rise of working from home, and demographic shifts — ensuring that there's no real "return to normal," not for consumers or for retailers.
Researchers at First Insight say their studies indicate that spending patterns may be undergoing a long-term shift, with consumers "not quite ready to begin spending at pre-pandemic levels." Fifty-nine percent say they still expect to cut back on spending compared to before the pandemic, only a slight improvement from last year's 62%.
"Retailers may be encouraged by the green shoots they are seeing now that many places are reopening, but it would be foolish of them to assume that everything will magically revert to the way things were in 2019 or early 2020," First Insight CEO Greg Petro said in a statement, noting sticky concerns about how the pandemic is impacting personal finances and even store safety.