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Pandemic paradox: economy suffers as Americans’ personal finances improve

SALT LAKE CITY — How can an economy slammed by COVID-19 help improve personal finances for nearly half of all Americans? This is the pandemic paradox.

The coronavirus crisis wiped out 22 million jobs in March and April, but the economy has since recouped more than 9 million jobs for a net loss of about 13 million jobs in the United States. At the same time, 45% of Americans say they are setting aside more money than usual, according to a new poll from The Associated Press-NORC Center for Public Affairs Research

Also, 26% percent are paying down debt faster than they were before the pandemic. In total, about half of Americans say they have either saved more or paid down debt since COVID-19 began, the AP poll finds.

Pandemic paradox 

On one level, it’s not so mysterious: There are fewer places to spend money, such as concerts, movies and ball games. 

Shane Stewart, DMBA (Deseret Mutual Benefit Administrators) financial planner, joins Lee Lonsberry on Live Mic to discuss what this means for the individual consumer and the economy at large. 

“Are there industries that previously employed the 10 percent [now unemployed] which are now just gone forever?” Lee asked.

“What I wonder about is if some of these industries like tourism and airlines and even gig jobs will probably look — the landscape will look different after all of this — and what I mean by that is maybe not as many players in those industries as there used to be because maybe only the few will survive,” Stewart said.

“If money is parked in savings accounts or checking accounts or  at least not being spent by folks, what are the ramifications of that?” Lee asked.

As a personal financial planner, Stewart praised those who can save money. But as an economist, he said consumers need to go out and spend if they can. He added he hopes that individuals who are savings and eliminating debt will remember those lessons for the future but then pick up their spending, but not on credit or dipping into their savings.

Live Mic with Lee Lonsberry can be heard weekdays from 12:30 p.m. to 3:00 p.m. on KSL NewsRadio. Users can find the show on the KSL NewsRadio website and app.