Fat piggy banks indicate economic upturn

by Giselle Smith

How much loose change do you have at home? The number of quarters, dimes, nickels and even pennies that people keep in their coin jars and piggy banks is an indicator of the health of the U.S. economy. More change saved means times are better.

During the recession, a lot of people emptied their change jars and put those coins back into circulation -- requiring the U.S. Mint to produce far fewer new ones. Increased demand for those circulating coins in 2011 means people have gone back to saving, NPR reported.

"People went into their piggy banks and their coin jars and spent those coins," Richard Peterson, deputy director of the U.S. Mint, told NPR's Planet Money. "Those coins flowed back into the banks and then ultimately back to Federal Reserve. The Federal Reserve vaults started filling up and they turned off the spigot of new coin production from the United States Mint."

The economic crisis hit the Mint hardest in federal fiscal year 2009, when a "massive flow-back of coins from circulation" led the Federal Reserve banks to order only 5.2 billion new coins, according to the Mint's annual report (.pdf file). That number represented the lowest level since the 1960s.

Though FY 2011's 7.4 billion new circulating coins falls far short of the Mint's peak shipments of more than 27 billion coins in FY 2000 -- spurred by concerns over Year 2000 and the popularity of the 50 State Quarters Program -- it represents an increase of 37%, NPR reported.

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Terry Brown's NOTE:

I can confirm this article, as I own a national fast food restaurant and a large laundromat.    Usually, we have to buy rolled coin from our bank several times a week to have enough change in our restaurant, but over a recent two year poor economic period, we rarely had to open our rolled coins, as we were getting lots of coins from our customers - but that has now changed, and we're having to buy rolled coins on a more regular basis - folks are paying with full paper currency, they are no longer scraping the bottom.   Same thing with our laundromat - for years we would average about the same amount of coins purchased from our change machine as we had in coins in our washer/dryers, but during those same two hectic economic years, we averaged about half the coins purchased vs what was used in the washer/dryers - indicating folks were bringing coins to the laundromat.    This indeed reflects an economy that is on the rebound for several different levels of economic status.    TB