Wednesday, September 29, 2010

Savings Rate Higher but Still Has Some Way to Go

The annual savings rate in the United States in 2009 was almost two percentage points higher than in 2008, climbing to a 17-year high of 5.9 percent. However, this level of savings was more than 20% lower than the 1929 to 2009 average of 7.5 percent, and ranked 52nd during the 80-year period.

An analysis of the moving averages during the period provides evidence that we may have reached a turning point; a moving average crossover occurred for the first time in about 30 years. That is, the 4-year moving average was higher than the 10-year moving average rate. This suggests that the personal savings rate may start trending higher. What remains to be seen is if it will persist as long as did in the 1960s.

Data courtesy of the Bureau of Economic Analysis, National Economic Accounts

No comments:

Post a Comment