Personal Savings Rate Decreases

Source: Wall Street Journal

The U.S. personal savings rate has been decreasing this year. Looking back at 2011, it has been steadily decreasing from 5.2% in January to 4.30% in September, but it began to increase by the end of the year to 4.70%. Although March showed a slight increase to 3.80%, the overall savings rate is not good from the perspective of individuals accumulating reserves for emergencies and other needs. This might be a good indication of individuals paying off debt since debt has high interest rates, and saving accounts, CD and money market accounts are paying less than 1% these days. Short sighted economist see this has having positive ramifications for the economy that consumers are spending more money.

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