Personal Savings Rate down to 2005 levels

Sharing is Caring!

by wanmoar

This is a chart of the % of disposable income put toward savings in the U.S. compared to inflation and prevailing 3 month CD rates.

As is clear, it was a secular downtrend until Q3 2005 starting what was to be an 8 year upward drift to the savings rate of Q2 1992. Ironically, the inflation rate in both periods was the almost identical.

See also  Each week we see 'new assaults' on common sense and personal choice

What I found interesting is that savings % tend to spike when CD Rates are lowered which is probably because CD Rates would fall in recessions which is when savings would spike.

I am not saying we are heading for disaster but if savings rise when the public thinks things are getting bad and fall when the public thinks there are better times ahead, then it seems public sentiment definitely is towards “things are looking up!” which has historically been the time just before recessions.

See also  David Moadel Warning: Stock Euphoria Is At EXTREME Levels

edit: it seems to be that people took on too much debt and now that rates are rising, they just don’t have the money to save. Forget investing, people seem to be running out of debt carrying capacity.


Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.