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Savings Rate Plunges To Lowest In One Year As US Consumer Once Again Tapped Out

Tyler Durden's picture




 

Today's personal income and spending report for the month of September was just the latest datapoint confirming that the US consumer is once again massively cash-strapped and is eating, literally, into their savings. While Personal Income rose at the expected pace of 0.4%, Spending in the last month came well above expectations of 0.6%, printing at 0.8%, which meant that on a net basis Consumers, always hopeful, outspent themselves by a margin of 0.4%. This meant that the savings rate declined from 3.7% in August to a tiny 3.3% in September. This was the lowest Savings print in 2012, and higher only compared to last November's 3.2%, which in turn was the lowest print since the start of the second great depression. In other words, overeager consumers saw their nominal incomes increase... and decided to outspend said rise at double the rate of increase! At this pace, by the time Thanksgiving rolls out, US consumers will have no savings at all left to tap and living will be strictly a month to month activity.

But wait, it gets worse. As the second chart below shows, the real story was that of the Real, not Nominal, Disposable Income, adjusted for the cost of living, which declined for the second consecutive month, and shows that the peak this year took place in July, having declined consistently ever since. In other words, even real incomes are now consistently declining, spending aside.

Based on this data, the US consumer is tapped out, has hit peak earnings power, and is looking at a holiday season where spending is expected to ramp up drastically with empty bank accounts and maxed out credit cards. But at least "housing has bottomed."

 

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Mon, 10/29/2012 - 08:51 | 2927378 Shizzmoney
Shizzmoney's picture

Weeeeeeeee!!!!!1111

I really don't understand how these fucking people are "confident" about the economy.  I guess they are only asking employed and well paid white people.

Mon, 10/29/2012 - 08:56 | 2927390 GetZeeGold
GetZeeGold's picture

 

 

CD or gold. Savings account or gold.

 

Hold on....I'm thinking about it.

Mon, 10/29/2012 - 08:59 | 2927409 CPL
CPL's picture

Silver and gold are about to get unmanipulated.

 

With all the casuals and their Algo's and HFT's offline we might have an honest trade happening over the next couple of days.  Go figure, awful storm keeps all the assholes offline.

Mon, 10/29/2012 - 08:56 | 2927403 Translator
Translator's picture

Black folks just want a welfare check from Obama, right?

Mon, 10/29/2012 - 09:01 | 2927414 CrimsonAvenger
CrimsonAvenger's picture

Don't forget Obama phone. Keep Obama in president, you know?

Mon, 10/29/2012 - 09:06 | 2927431 GetZeeGold
GetZeeGold's picture

 

 

Let's hope so....unless you want to deal with all the screaming freakin crying girls running loose without birth control.

 

Mon, 10/29/2012 - 10:26 | 2927705 asteroids
asteroids's picture

Don't worry about putting gas in your car or paying your mortgage, Obama's got you covered: http://www.youtube.com/watch?v=P36x8rTb3jI

 

Mon, 10/29/2012 - 11:07 | 2927858 DosZap
DosZap's picture

Black folks just want a welfare check from Obama, right?

There are tons of white/ hispanic trash that are exactly the same trust me I know some.

This has been the Obowells plan from day one, get as many on the free dole as possible,get em addicted to free shit, and after two stints at 99 weeks, you lose the WANT to support yourself, and work.You lose desire, and hope, and get the lazy ass.

PLUS, the Avg Fed workers income is 35% above the Natl Average...........35%...............think about it.

Plus there are no jobs worth a damn, unless you have specific skill sets.

Good morning and welcome to Wal Murt.

Mon, 10/29/2012 - 08:51 | 2927379 vinayjha
vinayjha's picture

Don't Ben is ready with his helicopter. I am waiting for the day his helicopter crashes with stock market.

http://www.freefdawatchlist.com/2012/10/things-to-watch-ahead-of-oct-29t...

 

Mon, 10/29/2012 - 08:51 | 2927380 jeff314
jeff314's picture

fuck you bernanke

Mon, 10/29/2012 - 08:55 | 2927395 Translator
Translator's picture

but but but the O'Bowel administration just reported consumer confidence at 5 year highs.......

 

 

What HASN'T Obama lied about?

Mon, 10/29/2012 - 09:03 | 2927422 rbg81
rbg81's picture

This is not a surprise.  Food continues to go up bigtime.  Healthcare premiums & copays are going up.   Tuition goes up 6% per year.  Utilities, cell phone and cable service always goes up, never down.  Mortgages may be cheap, but property taxes continue to rise.  Gas bounces around between $3.75 to $4.00.  Incomes remain flat.  So going into debt is the only way to survive for 80% of the country.

Mon, 10/29/2012 - 10:35 | 2927731 odatruf
odatruf's picture

Might be nice if people tried going without some iShit before going into so much debt. Here is a good acid test before you pull out your Visa / Mastercard: if your grandparents did need it to get by, neither do you. If you still one want anyway, you better be paying cash.

Mon, 10/29/2012 - 09:40 | 2927453 gmak
gmak's picture

Change "Obama lied about?" to "any Presidential Administration (ever) lied about?"

Mon, 10/29/2012 - 10:04 | 2927622 Translator
Translator's picture

Translation:

 

 

I am too big of a lying coward to admit that Obama has lied about everything!

 

 

Coward

Mon, 10/29/2012 - 10:41 | 2927746 toady
toady's picture

Please!

Everyone knows obama lies about everything.

And romney lies so much he can't keep track of them. I don't know how many times I've seen him be pro/anti war, pro/anti bailout pro/anti abortion.... he's pro/anti anything depending on the crowd, just like obama.

Ron Paul 2012!

Mon, 10/29/2012 - 10:45 | 2927760 gtb
gtb's picture

Obama is in a league of his own.  I defy anyone to name one thing about which the SOB has told the truth.  A real brain teaser, heh?

Mon, 10/29/2012 - 11:03 | 2927847 toady
toady's picture

I won't be dragged into defending that bastard.

I'm just saying i've rarely seen someone as obviously two-faced as romney.

We've all seen them, they tell you one thing then argue against it at a meeting, tell your wife one thing and your girlfriend another, leaving you stuck in the middle.

Damn it! I told myself I wouldn't let myself be dragged into this shit!

Ron Paul 2012!

Mon, 10/29/2012 - 11:40 | 2927957 DosZap
DosZap's picture

 I defy anyone to name one thing about which the SOB has told the truth.  A real brain teaser, heh?

 

Got ya one!, he promised to Fundamentally Change America,he damn sure has kept that promise.

Brown Shirts and all.

Mon, 10/29/2012 - 11:00 | 2927833 Buckaroo Banzai
Buckaroo Banzai's picture

Let's be clear: Romney is a flip-flopper and a waffler, not a liar.

Obama doesn't waffle, he either just flat-out lies, or covers up the truth, or both.

Mon, 10/29/2012 - 11:12 | 2927872 toady
toady's picture

I'm not so sure.. I think romney is just spinning, spinning, spinning, hoping to get just the right amount of confusion. It's a subtle way to lie, but it's still lying.

obama appears to believe his lies, so that can be confusing too.

What's really an awful lie is the media buying it all, hook, line & sinker.

Mon, 10/29/2012 - 09:22 | 2927396 alstry
alstry's picture

SAVINGS?  What a ridiculous concept.

In modern economic systems, savings is simply loaning non specific debts of others to banks....and the banks are bankrupt. When our systems are failing, it is the system that is paramount.  Anyone holding gold on the systemic failure of the Titanic simply became an anchor.

For Thousands Of Years People Benefited From Trading The Production Of Themselves And Others

Innovative Technology Is Now Efficiently Replacing The Need For Humans To Traditionally Produce

WHAT WILL PEOPLE & GOVERNMENTS DO?

There is ZERO HEDGE when we all milking each others' debts and the world is bankrupt in the http://www.udderworld.com

Today we learn the world does not need millions of people needlessly walking around meaningless jobs on Wall Street unsustainably consuming resources.  In fairness to NY, it is far more sustainable than most of the worthless suburbs around America.

Mon, 10/29/2012 - 09:32 | 2927503 GCT
GCT's picture

Look out all we now have Alstry here.  He is better then MDB!  This should be fun.  Be warned Alstry ZH is a fight club and will most likely not want to read about your social credit or another name for the welfare system!

Mon, 10/29/2012 - 10:20 | 2927680 ZeroAvatar
ZeroAvatar's picture

alstry's hoping he can funnel some viewers over to his website in order to cash in google clicks.

 

1.  See alstry comment

 

2. Downvote (red arrow)

 

3.  Scroll to next comment

 

So easy a caveman can do it!

Mon, 10/29/2012 - 08:56 | 2927397 Meatballs
Meatballs's picture

Broke Bitchezzz!

 

Mon, 10/29/2012 - 08:59 | 2927411 Temporalist
Temporalist's picture

It's a Kleptocrat Tsunami!  Clear the beaches!  Every taxpayer prepare!

Mon, 10/29/2012 - 09:00 | 2927413 LongSoupLine
LongSoupLine's picture

don't worry, that's what credit is for...

 

i mean, what's the worst that can happen?

oh, wait...nevermind.

Mon, 10/29/2012 - 09:02 | 2927418 BrigstockBoy
BrigstockBoy's picture

"Hey, we're losing all our damn money, and Christmas is around the corner, and I ain't gonna have no money to buy my son the G.I. Joe with the kung-fu grip!"

Mon, 10/29/2012 - 09:06 | 2927434 max2205
max2205's picture

SantaBama has a shiny new cell phone just for you

Mon, 10/29/2012 - 10:36 | 2927734 odatruf
odatruf's picture

hasn't been toys that cool in years...

Mon, 10/29/2012 - 09:04 | 2927426 max2205
max2205's picture

Why are futures trading!?

Another big move for equities to gap to Wed most likely.

Mon, 10/29/2012 - 09:05 | 2927430 pods
pods's picture

Didn't earning power peak in the 70's?

Now 2 incomes are lower than 1 in the 70s.

pods

Mon, 10/29/2012 - 09:07 | 2927435 Frastric
Frastric's picture

If we can get to 0% savings in the next few months then we can have one last hurrah...

And party likes it 2012!

Mon, 10/29/2012 - 09:07 | 2927438 Long-John-Silver
Long-John-Silver's picture

Saving Dollars is stupid. Converting your Dollars to Gold and Silver and saving that is smart.

Mon, 10/29/2012 - 09:09 | 2927443 Bruce
Bruce's picture

Real income declining due to QE (read DM, or debt monetization)-induced inflation, plus a dearth of jobs that pay a decent wage. Food and gas prices up for anyone eating or driving.  Healthcare costs soon to be up even more under Obamacare.  Real wages down.  The Fed may temporarily goose the markets (supposed "wealth effect"), but it has been shown to be insignificant (Hoisington Investment Mgmnt. Q3 Review and Outlook must read here:  http://www.hoisingtonmgt.com/pdf/HIM2012Q3NP.pdf ).  So small/no boost from QE/DM, and resulting inflation spike soon follows.  Next phase further recession.  The Fed is inept and useless.  The result is intuitively obvious to the most casual observer: econ. contraction soon to follow.  Rinse and repeat.

Mon, 10/29/2012 - 10:06 | 2927624 madcows
madcows's picture

Inflation is the Fed's goal.  It's the only way out of debt.  By making the dollar worth less, the debt's are easier to pay off.

But, the Fedtards don't understand that there are different types of inflation.  Debt devaluation through inflation only works if the people have money to burn... that is, the type of inflation where there are too many dollars chasing too few items.

These Fedtards are doing the exact wrong type of inflation.  They are destroying the value of the dollar by buying bonds, etc.... but the money isn't going into circulation.  Thus, they are driving up inflation without the people ever touching the paper.  Essential goods become more expensive.  The people buy fewer and fewer non-essentials.  GDP continues to sputter.  The Fed gooses more.  Essentials continue to climb.  The people go on welfare or EBT or SSDI.

This is bad inflationary policy.  If inflation is the root out, at least give the money to the people to spend.  But, of course, this isn't the desire of the Fed.  They keep the dollars, and make money with it.  They keep the banks gorging on low interest debt.  They keep the government going on fiat dollars.  Destroy the Fed.  They are the real cause of this mess.

 

Mon, 10/29/2012 - 12:11 | 2928056 grid-b-gone
grid-b-gone's picture

Before 2008, people spent maybe 10% of their income on things they didn't need, often didn't even want.

Mall shoppers shopped out of habit. Timeshares, magazine subscriptions barely or never read, long-term RV, ATV, or jet ski payments that were rarely used and may have required storage fees. When not buying out of habit, we'd eat out of habit.

Even still today, we have billions of dollars worth of clothes in closets with tags still hanging, guns never fired sitting in cabinets, books never cracked open, and DVDs and board games still in cellophane.

This is the string on which the Fed pushes. The richest society in the history of man, with its huge, post-war generation peaking, has discovered it was working for trinkets, sitting in production-maxing cubicles like caged laying chickens, singularly pursuing more for the sake of growth at the expense of precious time.

In the physical world, growth naturally leads to maturity, eating leads to expelling, inhaling leads to exhaling, hightide leads to lowtide, apogee leads to perigee, and inflation leads to flacidity.

Push that string until it looks like the snake river. Push that theoretical model as far beyond the laws of nature as you wish, even to the extent of pushing the currency into extinction. Natural forces will fix it all, eventually.

Mon, 10/29/2012 - 10:59 | 2927827 Taffy Lewis
Taffy Lewis's picture

Aw c'mon people, Bloomberg news says it's "a sign the biggest part of the economy was picking up as the quarter drew to a close". Green shoots.

Mon, 10/29/2012 - 09:10 | 2927446 adsanalytics
adsanalytics's picture

The chart of Income - Spending just took a dive south (after the jump) into a clearly unsustainable situation. Another poor sign is that personal income is largely driven by government transfers rather than wage growth.

http://www.adsanalytics.com/dashboard/docs/dashboard.php?treepage=tree_definition_main.php&chart=chart_bc_lilcs

Mon, 10/29/2012 - 09:18 | 2927467 lolmao500
lolmao500's picture

And now just imagine the saving rate in October and November after Sandy wipes out the east coast...

Mon, 10/29/2012 - 11:09 | 2927865 LawsofPhysics
LawsofPhysics's picture

Yes, but think of the taxable income that will be generated by the rebuilding. < sarc off >  Paul Krugman likes broken windows....

 

Mon, 10/29/2012 - 09:25 | 2927486 Robslob
Robslob's picture

 

Merry Halloween...at this pace forget Thanksgiving or Christmas...!

Mon, 10/29/2012 - 09:26 | 2927489 Yellowhoard
Yellowhoard's picture

So what that the world is spiraling into WWIII.

So what that race relations have never been worse.

So what that peoples savings are being gutted.

So what that we are becoming a flat out police state.

Obama has a sweet jump shot. He single handedly killed OBL.

Obama/Biden 2012! Let's finish the job!

Mon, 10/29/2012 - 09:26 | 2927491 madcows
madcows's picture

Government malfeasance and corporate kleptocracy are coming home to roost.  I sure am glad we bailed out the banks and unions.  I'll sleep well knowing they are well fed and warm with my dollars in their pockets.

Mon, 10/29/2012 - 09:33 | 2927499 virgilcaine
virgilcaine's picture

Hello..The Currency needs to be worth something for incentive to SAVE..= epic fed fail (2) The last thing the Fed wants is a bunch of frugal Savers.. go out and spend sheeple!

Mon, 10/29/2012 - 09:39 | 2927529 Being Free
Being Free's picture

the US consumer is once again massively cash-strapped and is eating, literally, into their savings

and of course as the savings decline the earned interest on the savings is taking a massive hit, plummeting from 0.04 to 0.03 Bernanks/mo.

Oh the humanity!

Mon, 10/29/2012 - 09:46 | 2927548 yrbmegr
yrbmegr's picture

Why should consumers have the money?  It does nobody any good in the hands of consumers.

Mon, 10/29/2012 - 09:47 | 2927553 virgilcaine
virgilcaine's picture

"dipping into their savings" ie.. going into credit card debt. Only in the bernanks fantasy world is this savings. They are broke u beared bufoon!

Mon, 10/29/2012 - 09:57 | 2927600 Seasmoke
Seasmoke's picture

I had well over 30k "saved" until they slashed my available credit balances below 5K

Mon, 10/29/2012 - 10:11 | 2927650 virgilcaine
virgilcaine's picture

I just transferred some "savings" to another CC.. 0%.

Mon, 10/29/2012 - 10:17 | 2927671 caimen garou
caimen garou's picture

why put money into banks that pay little intrest when I can invest in hard assests and work the farm, at least my free range chickens yield eggs and meat! got my winter garden in and got my limit of deer for the winter. life is great for people that live with in their means! 

Mon, 10/29/2012 - 10:43 | 2927751 fijisailor
fijisailor's picture

Is it considered spending down when you buy PMs and other hard assets instead of leaving your earnings with a fraudulent bank?

Mon, 10/29/2012 - 10:56 | 2927757 virgilcaine
virgilcaine's picture

When the Front Differential on the wifes MB  AWD goes it's hard to pay  for it with some veggies if u know what i mean..I'm fortunate have numerous Farms near me and purchase their produce and dairy and meat so I applaud ur efforts .  It's alot of work. 5 Generations for some here still at it, that's perserverance.

Mon, 10/29/2012 - 11:06 | 2927860 topspinslicer
topspinslicer's picture

Will inflation make it seem Christmas sales are just fine?

Mon, 10/29/2012 - 11:09 | 2927868 DosZap
DosZap's picture

Folks that buying new vehicles like crazy, are financing them for 72-84 mos......................talk about skewed & screwed headlines.

Mon, 10/29/2012 - 11:41 | 2927959 monad
monad's picture

Hayek's black market is doing fine. 

Mon, 10/29/2012 - 11:50 | 2927994 robertocarlos
robertocarlos's picture

Before you can save, you have to get out of debt. Except paying off your debt is counted as saving. Also buying gold and silver on credit is not counted as saving even though some people expect that the debt will be easily paid back, some day.

Mon, 10/29/2012 - 18:30 | 2929231 monad
monad's picture

This is BS. Just consider how they measure savinGs, as the amoUnt of moNey and value their bankSter cronies were able to locate. Obviously noone is depositing their money in the bAnk of And Its Gone. ALl that this measurEs is how much Americans diStrust, fear and hate their totalitarian police state, and we already knew this from the other indicators.

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