Announcer:
4 Your Money is brought to you by NelsonCorp Wealth Management.
Brandy Auterson-Hurst:
It’s now time for 4 Your Money. We’re joined by John Nelson, financial planner at NelsonCorp Wealth Management. Welcome back, John.
John Nelson:
Thanks for having me, Brandy.
Brandy Auterson-Hurst:
So there’s a lot more money in the economy today than there was years ago. How significant is that increase?
John Nelson:
Yes, it has been very significant, looking back even just a short while ago, with some of the stimulus money during the COVID-19 pandemic and how far things have come since then. And that’s the graphic I have with me today, Brandy, and it shows checking account balances for households and businesses. As we can see, this is going back to 2010, and you can see how significant things have jumped since 2019. That’s a significant jump from $978 to $4 to $4.5 trillion for households, so that’s been a significant jump in a short period of time. And in the bottom, in the red, is looking more at non-financial business checking accounts, and it’s kind of been the same trend. Not as significant as households above, but still very significant. And even though we was led on with some of maybe the stimulus policies that we saw, the fact that accounts have remained strong and stayed at record-level highs is pretty significant.
Brandy Auterson-Hurst:
Okay. So what could all this extra cash mean for the economy and investors?
John Nelson:
Yeah, I think it’s a double-edged sword. In one hand, you’ve got the liquidity, people have a cushion, more of a cushion now than they’ve had in a very long time. The other side of that is the demand side of inflation, looking at the spending that people still have the firepower to move with, that could keep inflation a little higher. So overall, we think it’s a good thing and can support the market for a period of time.
Brandy Auterson-Hurst:
All right, John, as always, thanks for joining us. If you missed any of our discussion, we’ll make it available for you on ourquadcities.com.
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