Saturday, October 24, 2009
Bigger U.S. Savings Than Official Stats Suggest
As the economic downturn continues, consumer spending has dropped 0.4%. This equals an amount of $40 billion out of the $10 trillion of total spending. However after when you take into consideration what economists call "pocketbook" spending, Americans have decreased spending by 3.1%, or $200 billion. What this means for us is that many Americans are saving more which allows them to repay any outstanding debt that they may have. An increase in overall savings will eventually lead to an increase in growth and get the economy back on track.
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I found this article to be intriguing. It's interesting to see just how much statistics can be miscalculated, and how a seemingly small percent can alter the economy so drastically. One thing to follow up with this article would be to continue to watch savings rates as the economy rebounds. Since they were almost at 0% quite recently and have gone up to over 6%, it will be interesting to see their next turn.
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