Monday, 29 April 2013

Why Save....When One Can Spend? U.S. Personal Savings Rate, Consumer Spending and Disposable Income Figures as of March 2013

The Personal Savings Rate and Personal Consumption Expenditures figures for March released today show the usual story about the U.S. consumer (the driver of the U.S. economy):

Why save....



...when one can spend?


The savings rate did improve during the recession of 2008/2009, but the longer term average is now once again heading lower.


As we reported on 6 March this year:
The U.S. consumer, and hence the U.S. economy (as consumer spending represents about 70% of GDP), is a fragile one indeed and is clearly dependent on higher incomes and more credit to increase spending further. The buffer for a rainy day is small indeed.
The March figures did not offer much evidence to the contrary; other than some signs that the year on year growth in spending is slowing down somewhat.


And the U.S. consumer appear not to be able to count on increased disposable incomes to further boost their spending as the year on year growth rates have only been 1.8%, 2.3% and 2.0% for the first three months of this year (granted, it increased by 7.0% in December).


Ever heard that story about the family that spent their way to riches? I thought not as no such story exists (at least as far as I know).

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