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Savings Rate Drop To 5.3%, Lowest In 10 Months

Tyler Durden's picture




 

Of today's Personal Income and spending numbers, the most relevant one was the savings rate. Income came unchanged at 0.4%, in line with expectations (previous revised to 0.4%), Spending was higher than expected, at 0.7% compared to 0.5% consensus (an increase of 0.3% from the revised 0.3% November point), meaning that the savings rate as a percentage of disposable income was 5.3%: the lowest since March 2010. The saving inflection point appears to have been 6.3% hit in June 2010. Is it all downhill from here?

Last but not least the PCE Core was just below expectations, at 0.0% compared to 0.1%. This was the clammest Year over Year core price gain on record. Once again: deflation is everywhere when one excludes everything.

 

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Mon, 01/31/2011 - 09:41 | 919865 Sudden Debt
Sudden Debt's picture

SPENDING IS UP!!!! ECONOMIC RECOVERY BITCHEZ!!!!

 

 

Mon, 01/31/2011 - 09:42 | 919867 overmedicatedun...
overmedicatedundersexed's picture

my car ate at my savings,my lights and heat ate even more..don't ask about food.

Mon, 01/31/2011 - 09:47 | 919890 unwashedmass
unwashedmass's picture

 

actually, i don't think its in anyone's grand plan that the peasantry be allowed to accumulate savings now. it is far easier to control the population if they are carrying staggering debt......

thing is, we really have to watch out for is when the peasants start repudiating the debt. then there will be real trouble.....and i suspect we could see a good deal of this when QE3 and 4 are announced in an effort to keep the banks solvent.

Mon, 01/31/2011 - 15:17 | 921264 RKDS
RKDS's picture

This.

Paid off my car and electric bills (lights, heat, etc) consumed almost all of the monthly savings.  Even if I had much money to spare, it'd be stupid to put it in a bank account earning maybe 1/10 of a percent while I have ANY debt accruing interest at 40-200 times that rate.

Mon, 01/31/2011 - 09:44 | 919876 Racer
Racer's picture

People are having to use any savings they have to pay the higher costs of food and fuel!

So spending goes up.. because the cost of the same amount of stuff went up and savings went down to pay for it

Mon, 01/31/2011 - 22:37 | 922550 Bobbyrib
Bobbyrib's picture

Spending goes up, because the price of food and energy goes up, but the inflation rate does not. That is the magic of Ben Bernanke.

Mon, 01/31/2011 - 09:44 | 919877 papaswamp
papaswamp's picture

Wonder what the personal debt levels did? Short American attention span kick in and gone back to debt/spending?

Mon, 01/31/2011 - 10:53 | 920104 A_MacLaren
Mon, 01/31/2011 - 12:18 | 920516 LooseLee
LooseLee's picture

Likely.., Boobusamericanus in fine form...

Mon, 01/31/2011 - 09:44 | 919879 cossack55
cossack55's picture

Who in their right mind saves FRNs? LMAO.  They might ask who is saving:

food

ammo

PMs

etc.,etc.,

Mon, 01/31/2011 - 09:49 | 919895 EscapeKey
EscapeKey's picture

I wouldn't say "saving", but I have a bit of cash stashed away in Pound Sterling, Euros, Dollars, and Danish Kroner, just in case the banks start to "take extra holidays". It really goes along with keeping a months worth of food (which is rotated) just to be on the safe side.

Mon, 01/31/2011 - 10:07 | 919934 gwar5
gwar5's picture

Just a month's worth of food? I must be insecure.

My baseline my whole life has always been about 2 months of canned goods

I probably have enough for a year now. Plus, I've been fattening up my neighbors.

 

Mon, 01/31/2011 - 10:05 | 919929 redarrow
redarrow's picture

Lol...FRN = Food Riot Notes.

Mon, 01/31/2011 - 13:00 | 920716 Zero Govt
Zero Govt's picture

Thanks, you've saved me from having to write my usual rant, i luv private enterprise

Mon, 01/31/2011 - 09:45 | 919883 Hephasteus
Hephasteus's picture

Oh look. People making up numbers again.

Mon, 01/31/2011 - 09:46 | 919884 Oh regional Indian
Oh regional Indian's picture

Deflation is everywhere once you exclude everything...classic! 

And look at the spike in MAY 08. Is it a leading indicator of what was to come later that year? or is it a lagging indicator from the true crisis beginning in late 07? Interesting. I thought I'd see that spike in November/Dec 08.

ORI

http://aadivaahan.wordpress.com/2010/11/18/enchanted-mesmerized-en-chained/

Mon, 01/31/2011 - 10:06 | 919933 Hephasteus
Hephasteus's picture

It's tough to say. As I've studied the fraud in the computer industry it's followed the same path as the banking industry. The fraud started off big in 2000 and got so massive by 2007 that they decided to pull the plug on it.

You know those IT folks in india. You don't quite know what is up with them. But this may help ya understand. Some of them are just idiots. But you suspect some of them are assisting the defrauding.

http://teledataesys.wordpress.com/

Mon, 01/31/2011 - 10:43 | 920058 Oh regional Indian
Oh regional Indian's picture

Not sure of the connect with the topic Heph.

But that site you linked to is a bunch of crap. And one company. And stock fraud.

ORI

Mon, 01/31/2011 - 11:45 | 920347 Hephasteus
Hephasteus's picture

You were talking about the IT folks in india sucking up to the "british empire".

Mon, 01/31/2011 - 15:29 | 921297 RKDS
RKDS's picture

Many Indian IT services are, quite frankly, pitched and sold on little more than outright fraud and deceptive estimates.  All of the imaginary savings end up costing more in reality (identity theft for starters) and that hampers the ability to save.  Unemployed Americans don't save and neither do businesses overpaying for substandard service.

Mon, 01/31/2011 - 09:47 | 919888 Bill Lumbergh
Bill Lumbergh's picture

This statistic is incredibly misused by the media...I love how they state "savings are at a 10 year high" or something to that effect...without stating they were so low for the past 25 years that the new savings are just one small step towards repairing balance sheets.

Mon, 01/31/2011 - 10:31 | 920012 snowball777
snowball777's picture

I've reduced my crack consumption by 3%...I'm well on the way to "recovery".

Mon, 01/31/2011 - 09:49 | 919896 Seasmoke
Seasmoke's picture

 there is no need to save for that rainy day, its already here

Mon, 01/31/2011 - 09:52 | 919897 razorthin
razorthin's picture

bullshit

Mon, 01/31/2011 - 09:56 | 919901 Sudden Debt
Sudden Debt's picture

nonononono, Saving rate is down because US lemmings are more confident and don't see the need of saving anymore!!

 

DON'T ASK WHAT UNCLE SAM CAN SPEND FOR YOU!!!

BUT ASK WHAT YOU CAN SPEND FOR UNCLE SAM!!

 

 

Mon, 01/31/2011 - 09:57 | 919906 Johnny Lawrence
Johnny Lawrence's picture

Two words: Gas prices.

Mon, 01/31/2011 - 10:02 | 919917 Sudden Debt
Sudden Debt's picture

Once the conversion will be done from gallon to liter, you'll clearly see that the price on the counter will be still the same like 2008 prices.

 

Don't worry.

Mon, 01/31/2011 - 10:01 | 919914 gwar5
gwar5's picture

Hey, we were doing good.  Seems people have to eat.

Maybe it's going into items like physical PMs that the Fed doesn't track, or,

Maybe the Fed strategy of debasing people's money out of savings is working.

 

Mon, 01/31/2011 - 10:04 | 919922 TruthInSunshine
TruthInSunshine's picture

If an American was spending 4% more than they were earning, yet they begin spending only 2% more than they are earning, does that mean they have doubled their rate of savings?

To futher this thought, if they maintain this new rate of savings, does that mean they'll pay off their debt twice as quickly?

Eureka!

Mon, 01/31/2011 - 10:06 | 919930 topcallingtroll
topcallingtroll's picture

This is.good.news! The masses are spending again!.

Mon, 01/31/2011 - 10:06 | 919931 b_thunder
b_thunder's picture

those iPads ain't free, you know....

 

Mon, 01/31/2011 - 10:13 | 919950 Sudden Debt
Sudden Debt's picture

Actually THEY ARE!!

http://usnews.rankingsandreviews.com/cars-trucks/daily-news/100402-Buy-a-Hyundai-Equus-Get-a-Free-iPad/

 

you only need to buy a Hyundai Equus, AND YOU CAN CLAME ONE OF YOUR OWN FOR FREE!!

 

FREE!! FREE!!! FREE!!!

Waw...

Mon, 01/31/2011 - 10:32 | 920014 bunkermeatheadp...
bunkermeatheadprogeny's picture

Pent up demand, nothing to see here.

Mon, 01/31/2011 - 10:35 | 920028 papaswamp
papaswamp's picture

NIPA Personal Savings rate is at a 60 year low...

http://www.bea.gov/national/nipaweb/Nipa-Frb.asp

Mon, 01/31/2011 - 13:04 | 920736 Zero Govt
Zero Govt's picture

Bernanks 0.00% interest rates are working at winkling out any remaining reserve wealth, his inflation has ruined the value of wages as spending power... he has what he wants, the centrally controlled bankrupt economy about to head off a cliff. Genius!

Mon, 01/31/2011 - 13:18 | 920805 Samuel Morales Jr.
Samuel Morales Jr.'s picture

I wouldn't be surprised if the savings rate goes below zero again. Or at least close to zero. Heh.

Mon, 01/31/2011 - 23:11 | 922637 Trimmed Hedge
Trimmed Hedge's picture

This is insane. How do people live like this?

 

I save about 40% of my gross -- and I still feel poor....  : (

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