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Here We Go Again?

US Consumers must feel the good times are here again. The U.S. saving rate dropped to 2.7%, its lowest level in two years.  At the peak of the market in April of 2008, the average U.S. saving rate was 0.8%. Worried consumers increased their savings rate to a high of 6.4% in May 2009, but the savings rate has gradually declined as consumers became more confident. During the early 1980’s, the average U.S. saving rate was about 10%.

U.S. consumer spending rose twice as fast as income in March, as saving dropped to its lowest level in 18 months and a closely watched indicator of inflation remained stable, the Commerce Department reported. Consumer spending increased by 0.6% from the prior month, likely lifted by government efforts to spur economic growth, but personal income rose just 0.3% on a weak labor market. As a result, the U.S. saving rate dropped to 2.7%, its lowest level since September 2008.

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