Data released by the Bureau of Economic Analysis suggests that previous estimates of the U.S. personal savings rate may have been wildly inaccurate:
“Take just the first quarter of this year: The agency more than doubled its estimate of the personal saving rate–the difference between disposable income and spending—to 7.2% from the 3.3% estimated previously.”
“The new number exceeds the 6.4% average rate recorded since 1990, and is almost three times the most recent low of 2.5% in 2005.”
I had previously read predictions that a regression to the average rate (~6%) would effectively wipe out GDP growth. There is also the concern that a stretched U.S. consumer would fail to spark a rebound in growth in the event of a recession. These new figures are consequently quite meaningful.
It’s an astounding difference, and a positive surprise for the economy.