Friday, July 31, 2009

The US saving rate: before and after 8:30 am today

It would be criminal of me not to post this chart. The BEA has "found" that households have been in fact saving roughly 1% more of their disposable income per quarter since 1995, 0.9% per quarter in 2008.

The chart illustrates the bi-decade event that is the BEA's comprehensive revisions to the national income accounts (yes, nerdy me downloaded the saving rate series here in anticipation of the release). It is almost a rule that the saving rate is revised upward, and this time is no different. The saving rate has been revised to show a steady increase from an average of 1.7% in 2007 to 2.7% in 2008, and a surge to 4.6% in the first half of 2009. This looks large compared to the previous 2007-2009Q1 averages of 0.6%, 1.8%, and 4.3%, respectively.

Households have been "delevering" for a longer time period than previously thought - as recent as 2008 Q1, the saving rate that was reported to be essentially zero, 0.2%, is now 1.2%.

Rebecca Wilder


  1. Like we don't have a choice if we want to stay afloat. Nice habit to get into, too. aj

  2. Do you think that the BEA deliberately understates the savings rate? What would be the purpose of that?

    Also, did you see the story on the South Korean savings rate falling to a world low in the WP?

  3. Hi Freude!

    First, thanks for linking to this post. I tried to email you this, but couldn't find an email address on your blog. Notice that I added the word "more" after the 1% in the first paragraph. Will you do the same in your blog?

    I definitely don't think that the BEA understates saving purposefully. It is simply more difficult to measure income than it is to measure spending. Personal income is often subject to heavy revision(mostly upward); and so saving, which is the residual between income and spending, rises. And if I remember correctly from the release, spending was likewise revised downward pretty significantly.

    No, didn't see the story on South Korea. Is there a link? Sounds interesting.

    Thanks again for commenting and linking.