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Some experts fear households will quickly spend their savings and fuel runaway inflation.
Studies suggest most will hold onto the cash even after the US reopens, Fed researchers said.
Gradual reopening and widespread vaccination have economists wondering how Americans will spend in a post-pandemic economy. Researchers at the Federal Reserve Bank of New York see little cause for concern.
Americans enjoyed a savings surge during the pandemic as government stimulus hit households and lockdown measures cut down on spending. Estimates suggest people held on to roughly $1.6 trillion in savings since last March, when the health crisis first slammed the economy.
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Weaker-than-expected global economic growth could hinder the US recovery, Fed researchers said.
The CBO expects US GDP to grow 4.6% in 2021, but the chances of that fade on slower global growth.
The Fed simulated 2021 growth 1 million times and found weak global growth almost guarantees US underperformance.
The US economic recovery hinges a great deal on how the rest of the world rebounds, according to researchers at the Federal Reserve Bank of Dallas.
For the moment, the US is expected to fully recover from its virus-induced downturn by the end of the year. The nonpartisan Congressional Budget Office projects gross domestic product will expand by 4.6% in 2021, offsetting the 3.4% contraction seen in 2020.
Higher-wage workers were likely insulated from the economic fallout due to their jobs flexible nature, the researchers said. About 37% of upper-middle-wage workers were able to work remotely through the pandemic. That share climbed to 57% for those earning more than $85,000.
By comparison, only 7% of low-wage workers and 13% of lower-middle-wage Americans were able to telecommute.
Racial disparities also worsened during the pandemic s initial shock. Employment broadly fell 15% from February to April. But where white Americans faced a 15% decline, employment of Black Americans tumbled 16%. Hispanic employment fell 20% over the same period.
Women shouldered a bigger hit than their male counterparts. Female employment dropped 18% from February to April, compared to the 13% decline men saw.