Americans Save Up In A Fragile Economy

July 1st, 2010

It seems our consumer culture is starting to appreciate a nest egg – spending less and saving more.

This May, wary Americans put more into savings then any other month since September, reflecting a cautious financial attitude after the economy’s tumble.
This conservative financial attitude comes mostly from sluggish wage growth, which could get even worse at the end of the year when temporary census jobs expire.
The gross domestic product takes a blow when consumer morale is low, because it is largely based on spending; meaning that saving – though wise – slows America’s economic recovery.

In May, the personal savings rate rose +4%
At the height of the housing boom in 2005, the personal savings rate was barely 1%