United States Personal Savings Rate
Americans aren’t good at saving money. The average amount of disposable income—income less taxes, not to be confused with discretionary income—saved has dropped from 11% in the 1980s to 1% before the start of the current recession. A graph is appropriate here:
I’m not some anti-materialist nazi, but that downward march is the increased confusion that Americans have between “wants” and “needs”. Sure, real wages have decreased over this time period, but not nearly at the rate that savings has slumped.
The uptick for 2009? That’s the just-released data for January of this year which pegs the rate at 5%, up from 1.8% in 2008 and 0.5% the previous year. August of 2005 even featured a rate of negative 2.7%, a feat matched only by the -0.2% rate in 2001. Though I would generally argue that people thinking about their future rather than instant gratification is a wonderful change, increased saving isn’t what an economy needs to break out of a recession.
- Personal Saving Rate, January 1959 through January 2009 from the St. Louis fed
- The same data as a Numbers spreadsheet (zip) and Excel spreadsheet, with annual averages