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Americans Burned Through $46 Billion In Savings To Fund December Purchases: Savings Rate Lowest Since January 2013

Tyler Durden's picture




 

If there was any confusion where the funding for what little shopping spree Americans engaged in during December, it should all go away now. While the street was expecting a 0.2% increase in both personal income and personal spending in the month of December, what it got instead was a flat print in income (i.e. unchanged from November) while spending (mostly for non-durable goods) spiked by 0.4% meaning there was a 0.4% funding hold that had to be filled somehow. That somehow we now know is personal savings, which tumbled from a revised 4.3% to 3.9% - the lowest since January 2013, only back then incomes would rise for the rest of the year driven by the 30% increase in the S&P "wealth effect." This time, with the Fed now tapering QE, the only way is down for both the "wealth effect" and Personal Incomes... and thus Personal spending, that majority component of US GDP.

Finally, this data means that according to the BEA in December US consumers funded some $46 billion in spending through burning down their savings. As of December 31, 2013 total personal savings left are down to $495 billion.

Source: BEA

 

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Fri, 01/31/2014 - 09:50 | 4387457 fonzannoon
fonzannoon's picture

I bet a lot of people used some of those savings to switch to nat gas to lower their bills.

Fri, 01/31/2014 - 09:59 | 4387497 Four chan
Four chan's picture

i try to burn other peoples money if at all possable.

Fri, 01/31/2014 - 10:04 | 4387516 MillionDollarBonus_
MillionDollarBonus_'s picture

Point take Tyler. But the financial state of the many of the silverbugz here is sadly far worse than the average American could even imagine.

Read today's article at the Accredited Times to learn about the narcissistic tendencies and sick masochism that characterize the silverbug mentality:

http://accredited-times.com/2014/01/31/accredited-insights-a-day-inside-...

Fri, 01/31/2014 - 10:05 | 4387527 krispkritter
krispkritter's picture

Isn't it a little early for MillionDollarSPAMus?

Fri, 01/31/2014 - 12:57 | 4388327 zaphod
zaphod's picture

Remember, they already changed the calculation over 10 years ago when personal savings went negative, so these numbers are bogus.

The real savings rate, minus financial based gains, is negative right now. That means the US is consuming and not producing. 

Our ancestors would be proud.

Fri, 01/31/2014 - 10:08 | 4387535 Charles Nelson ...
Charles Nelson Reilly's picture

Yes..... It's all the silverbugz fault!?!

Fri, 01/31/2014 - 10:30 | 4387646 silvermail
silvermail's picture

It is very strange that there is no one asshole, which in any discussion, begin intrusive to advertise their crappy bitcoin.

Fri, 01/31/2014 - 12:52 | 4388317 midtowng
midtowng's picture

The fact that Bitcoin fans have resorted to spam really makes Bitcoin look bad

Fri, 01/31/2014 - 10:32 | 4387655 National Blessing
National Blessing's picture

I don't have a dime in the bank.  I live hand to mouth.  Lots of people are in the same boat.  Oh well.

Fri, 01/31/2014 - 15:21 | 4388862 Taffy Lewis
Taffy Lewis's picture

You're back from your hiatus. Nice to see!

Fri, 01/31/2014 - 10:32 | 4387657 Dr. Engali
Dr. Engali's picture

Crazy ass silverbugs. Don't they know they are supposed to buy at higher prices instead of waiting for the dip?

Fri, 01/31/2014 - 10:32 | 4387661 F.A. Hayek
F.A. Hayek's picture

I want those two minutes back. That's some of the worst drivel I've read since perusing the HuffPo to see what the moonbats are up to today.

Fri, 01/31/2014 - 11:01 | 4387769 ejmoosa
ejmoosa's picture

That's the lamest shit I have ever read...

The fact it ends with a conclusion was the lowlight of the story.

Fri, 01/31/2014 - 10:00 | 4387506 NoDebt
NoDebt's picture

Spending on something that will improve their situation in the future?  Surely, you jest.

 

Fri, 01/31/2014 - 10:06 | 4387526 RSloane
RSloane's picture

The fed gov't does not want people to save. Its that simple. In some insipidly assanine sort of way they believe that if people spend their savings then magic will take place and the velocity of money will instantly increase and we will all be saved by unicorns shitting fairie dust out of their asses. It doesn't matter that savings rates even in emerging markets where wage suppression is a matter of public economic policy far outpaces that of Americans. Spend until you drop or go on welfare [where you will keep spending anyway] is the philosophical flogging of American consumers until nothing is left....for the good of the gov't don't you know.

Fri, 01/31/2014 - 09:51 | 4387464 Bobbyrib
Bobbyrib's picture

"Americans Burned Through $46 Billion In Savings To Fund December Purchases: Savings Rate Lowest Since January 2013"

 

How stupid are people? Burning through your money in an environment where you shouldn't expect a raise and for healthcare costs to rise is not too bright.

Fri, 01/31/2014 - 10:18 | 4387475 Max Damage
Max Damage's picture

Yeah but there is loads of cheap and nasty xmas pressies filling up the trash cans now. Waste disposal is the place to be!!!

Fri, 01/31/2014 - 10:32 | 4387654 Papasmurf
Papasmurf's picture

LOL, I used to watch a friend do that.  Before xmas, the SUV was filled with gifts.  The day after, three trask cans of waste sat at the curb.  They never have money at the end of the months and don't know why.

Fri, 01/31/2014 - 09:57 | 4387479 NoDebt
NoDebt's picture

"How stupid are people?"

In my experience, somewhere between 'very' and 'extremely'.

Fri, 01/31/2014 - 10:21 | 4387603 dobermangang
dobermangang's picture

People are spending their savings so they don't go bankrupt.

http://www.youtube.com/watch?v=LHFEcyUNBjg

Fri, 01/31/2014 - 09:59 | 4387488 Carl Popper
Carl Popper's picture

A lot of people don't have much choice. 

 

Others have just responded to incentives.  If you have assets or work too hard you can't get any subsidies. 

Fri, 01/31/2014 - 09:57 | 4387489 ghengis86
ghengis86's picture

Think about how stupid the average American is; 50% are dumber than that!

Fri, 01/31/2014 - 10:03 | 4387519 Dr. Engali
Dr. Engali's picture

Why save when Zero will give you everything you need for free? 

Fri, 01/31/2014 - 09:55 | 4387470 buzzsaw99
buzzsaw99's picture

dum fuks

Fri, 01/31/2014 - 09:55 | 4387472 Dr. Engali
Dr. Engali's picture

Half the country is on welfare , and it just got cut, millions of people have dropped off of unemployment, and these idiots believe they will see rising income.....Idiots.

Fri, 01/31/2014 - 09:54 | 4387473 B2u
B2u's picture

Don't I get free health care, phones and food stamps?  No reason to save money.

Fri, 01/31/2014 - 10:00 | 4387503 Carl Popper
Carl Popper's picture

And utility assistance plus transportation vouchers, free or subsidized daycare, etc. 

Fri, 01/31/2014 - 10:18 | 4387593 yogibear
yogibear's picture

Can't have more than $2,000 in savings so it's spent.

Uncle sugar encourages people to be broke and dependent on the government. Have to keep the government people handling social services cases and the checks coming.

It's LBJs Great Society.

Fri, 01/31/2014 - 09:55 | 4387476 Sudden Debt
Sudden Debt's picture

Obama's not going to like that...

IT'S HIS MONEY HIS SERVS ARE SPENDING!!

Fri, 01/31/2014 - 09:59 | 4387480 The_Ungrateful_Yid
The_Ungrateful_Yid's picture

Taxes are killing americans....school taxes, property taxes, city or neighborhood taxes this time of year. Fuck this non sense.

Fri, 01/31/2014 - 10:03 | 4387518 krispkritter
krispkritter's picture

I have no kids, live off two dirt roads, FD is 15-20 minutes away, yada, yada...my taxes are the same as those in town and I only go there to pay my taxes.  Actually I just mailed mine this year, didn't feel like getting patted down at the courthouse...

Fri, 01/31/2014 - 13:26 | 4388452 Intoxicologist
Intoxicologist's picture

Same situation here.  Property taxes are due today.  I don't believe in due dates, so they can just wait until I'm good and ready to pay them. 

Fri, 01/31/2014 - 10:04 | 4387522 ghengis86
ghengis86's picture

+1000

One rental property that I own is up for lease renewal at the end of the month. I really like the tenants too, but after an increase to the non-owner occupied rate and a local income tax increase, I'm going to have to raise their rent significantly. So all the tax increases just fuck over the lower-middle class as the shit gets passed to them.

Think I'm going to just sell and get out of th RE rentals; I'm a sitting duck/fat cow for the greedy fucking pols

Fri, 01/31/2014 - 10:13 | 4387550 LawsofPhysics
LawsofPhysics's picture

If I didn't build most of the rentals I own, I could be in a simlar situation.  Owning properties free and clear makes a big difference.  I hate fucking middlemen (which is all taxes and "fees" support).  I know several people who own rentals in your situation.  Many if not all, unlike myself and one or two locals, are leveraged to the fucking hilt.

Good luck passing on those higher rents to indebted/broke students or people who have not seen a raise in years.

Real estate bubble 2.0 (this time with a shitload of abandon property on the bank's books already, all marked to fantasy).

Fri, 01/31/2014 - 10:37 | 4387676 Papasmurf
Papasmurf's picture

The Bullseye is on your back.  Rent controls will be coming.  Then your choice is to get out of the biz or let the buildings perish.

Fri, 01/31/2014 - 10:54 | 4387734 LawsofPhysics
LawsofPhysics's picture

Here's a thought;  Rent to intelligent tenants and let them know what's happening. Bring them into your tribe, you might be surprised how eagerly such people will help you lynch the local taxman/politician.  History is very clear on some things, one of which is that all economies are really local at the end of the day.  We have had 30+ years of "globalization" and the pendulum is swinging back as that which cannot be sustained, won't be.

Fri, 01/31/2014 - 11:00 | 4387763 Carl Popper
Carl Popper's picture

Lynching politicians.

You are giving me a woody with the fantasy

Fri, 01/31/2014 - 12:02 | 4388091 ReactionToClose...
ReactionToClosedMinds's picture

boy ...wish were true ....but new NYC Mayor is waiting for his 'burn them out' moment ........

....someone here referenced it already ....1974...... which led to movie Escape From New York circa 1980 I recall

Fri, 01/31/2014 - 09:56 | 4387486 sudzee
sudzee's picture

Savings - where your hard earned fiat goes to die. Was it spending of savings or bank fees.

Fri, 01/31/2014 - 09:59 | 4387490 buzzsaw99
buzzsaw99's picture

owebombacare will raise taxes on the poor and dwindling middle class. that should help.

Fri, 01/31/2014 - 09:59 | 4387500 Thoresen
Thoresen's picture

Time to rush into BitTulipCoin. At least the Dutch had a bulb to plant after the bubble burst.

What beats roses on your piano? Tulips on your ..........

Fri, 01/31/2014 - 10:00 | 4387502 mayhem_korner
mayhem_korner's picture

 

 

So 330 million persons spent $46B beyond their means in one month...while Obama-Ben-Yellen and the 535 minions in CONgress achieve the same every 2-3 weeks?  Got it.

Fri, 01/31/2014 - 10:01 | 4387508 Dr. Engali
Dr. Engali's picture

Thank goodness for the MyRas. Now that everybody is poor we have something to put our $5 per pay in.

Fri, 01/31/2014 - 10:04 | 4387512 fonzannoon
fonzannoon's picture

It's fascinating how good Goldman has become at predicting Equity and PM moves eh?

Fri, 01/31/2014 - 10:10 | 4387545 Dr. Engali
Dr. Engali's picture

Yeah it's almost as if they know something.

Fri, 01/31/2014 - 10:14 | 4387563 NoDebt
NoDebt's picture

100% winning trading days for years straight says they're JUST THAT GOOD at what they do.

Fri, 01/31/2014 - 10:18 | 4387565 RSloane
RSloane's picture

G'morning Doc and Fonz.

Doc you beat me to it. Goldman has been quite prescient of late because of course they have a hand in it, just as they do so many things in so many countries. There's a reason why they're referred to as "The Squid".

Fri, 01/31/2014 - 10:04 | 4387514 Seasmoke
Seasmoke's picture

Lower the Damn prices motherfuckers !!!..... Deflate 

Fri, 01/31/2014 - 10:04 | 4387517 youngman
youngman's picture

People are thinking its going to get better next week..month..year...so why not spend now....this is what they are being told by Obama and the MSM....They better hope it does...or they are in trouble....I think in 10 years 80% of the people will have no savings....living week to week....but credit cards will be booming again...Americans cant go back intime..that will take a few generations...Americans want..and they will spend to get it....

Fri, 01/31/2014 - 13:57 | 4388544 WhyWait
WhyWait's picture

You here on this site are so far off the mark.  People with little left - and not much hope - chose to go ahead and spend what they could on what at least some sensed was one last good Christmas, in the gifting ritual that reaffirms their family ties.

In the years ahead, while you draw on your gold and survival stashes and scheme to preserve your wealth, their families may well be all they have left. So was their decision to spend really foolish?

 

 

Fri, 01/31/2014 - 10:06 | 4387530 LawsofPhysics
LawsofPhysics's picture

Americans have savings?  In this case I am genuinely shocked.

Fri, 01/31/2014 - 10:17 | 4387574 NoDebt
NoDebt's picture

I think they include things like saved up vacation and sick days, the leftover ham sadwich in the fridge at work and Beanie Baby collections.

Fri, 01/31/2014 - 11:13 | 4387582 LawsofPhysics
LawsofPhysics's picture

Makes sense, I mean the banks now consider these things to be grade A collateral as well.

Fri, 01/31/2014 - 11:44 | 4387984 KickIce
KickIce's picture

Except they place the value of the sandwich at two grand on the books.

Fri, 01/31/2014 - 13:24 | 4388433 Intoxicologist
Intoxicologist's picture

I thought a "ham sandwich" was a euphimism for a gun?

Fri, 01/31/2014 - 10:07 | 4387531 TideFighter
TideFighter's picture

Personal spending includes personal medical expenses when insurance plans are cancelled due to BarryCare. 'Merikans were forced to dole out savings for surgeries, doctor visits, and medicines previously covered by their own insurance plans. The "silver" plan average deductible was $6,500, with the next savings deductible threshold at $12,500.  

Fri, 01/31/2014 - 10:08 | 4387533 ArkansasAngie
ArkansasAngie's picture

The times they are a changing ... ready or not.

 

Fri, 01/31/2014 - 10:10 | 4387542 Pheonyte
Pheonyte's picture

So if I did the math correctly, there's less than $2500 in savings per working age person right now.

Fri, 01/31/2014 - 10:16 | 4387567 dobermangang
dobermangang's picture

I guess that Bronze plan Obamacare health insurance with the $6,000.00 deductible is kind of useless for the masses.

Fri, 01/31/2014 - 10:10 | 4387543 Racer
Racer's picture

And is the increase in spending actually buying more stuff or in reality less stuff because of inflation

Fri, 01/31/2014 - 10:15 | 4387559 Ness.
Ness.'s picture

Incomes down - spending up.  USA! USA!

Fri, 01/31/2014 - 10:15 | 4387568 Spungo
Spungo's picture

Our economy is doomed because the number is still higher than 0%. Our intelligent central planners have clearly stated that the economy will only get better if we use rising asset prices to get a HELOC then spend more money than we have, effectively having a negative savings rate. Yes they actually said this.

Fri, 01/31/2014 - 10:15 | 4387573 ifishivote
ifishivote's picture

Me and my wife have a couple of bucks in the bank. We spend $100 on each other for Christmas. Most of the money is actually spent on items for the house. I have friends that dont have a pot to piss and yet they go balls to the wall spending on Christmas. I guess that's why I have money

Fri, 01/31/2014 - 10:25 | 4387615 Pheonyte
Pheonyte's picture

Might I suggest you get that couple of bucks out of the bank and into the mattress? It's not like you're getting any interest on it, and may very well wake up one day and discover it's been Cyprussed.

Fri, 01/31/2014 - 10:22 | 4387599 chistletoe
chistletoe's picture

I can't wait to see what happens when they start receiving their new electric, gas and fuel oil bills ....

Fri, 01/31/2014 - 10:23 | 4387609 unplugged
unplugged's picture

Cash out all your savings before the MyRA squid wraps its tentacles around it.

Then use it to buy physical gold/palladium/platinum and put it where no one will find it.

Quit your job.

Sign up for every govt assitance program in existence.

Crash this motherfucking system now so we can start the rebuilding process.

I'm tired of waiting.

I don't want to die under the current system.

Fri, 01/31/2014 - 10:30 | 4387644 Dr. Engali
Dr. Engali's picture

I've got news for you. Once the Myra's hit $15,000 the squid gets them.

Fri, 01/31/2014 - 10:50 | 4387731 Billy Sol Estes
Billy Sol Estes's picture

Done           Cash out all your savings before the MyRA squid wraps its tentacles around it.

Done, but it was stolen by a theif          Then use it to buy physical gold/palladium/platinum and put it where no one will find it.

In progress    Quit your job.

No, fuck you   Sign up for every govt assitance program in existence.

In progress    Crash this motherfucking system now so we can start the rebuilding process.

Fri, 01/31/2014 - 11:12 | 4387804 unplugged
unplugged's picture

No, fuck you   Sign up for every govt assitance program in existence.

LOL!  Yeah, I'm with ya.  I hate this part too.  But I would do it just to accelerate the wipe-out.

Fri, 01/31/2014 - 11:28 | 4387890 SeanJKerrigan
SeanJKerrigan's picture

Typical utopic thinking -- destroy what is in hopes of restoring a lost world. Problem is, it never works out that way. Destroyed lives, whether by violence or other methods (but especially by violence) tend to stay that way. Barring complete and total collapse (which would probably result in millions upon millions of deaths), the likely outcome of financial disruption is merely an accelleration of the expanding totalitarian state.

In short, enjoy your freedom while you have it. Live for today.

Fri, 01/31/2014 - 11:38 | 4387946 autofixer
autofixer's picture

Is that you Cloward & Piven? 

Fri, 01/31/2014 - 10:28 | 4387631 the not so migh...
the not so mighty maximiza's picture

fuk'in A , and sales still sucked

Fri, 01/31/2014 - 10:56 | 4387742 pragmatic hobo
pragmatic hobo's picture

kinda makes you wonder what really happened at ups, no?

Fri, 01/31/2014 - 10:27 | 4387639 yogibear
yogibear's picture

MyRa is the way for the Fed to off-load it's treasury holdings on it's balance sheet. 

Always a scheme.

Fri, 01/31/2014 - 10:33 | 4387658 unplugged
unplugged's picture

they also need a channel to soak up all the foreign-owned (ie, China) treasuries that will be coming home en masse soon

Fri, 01/31/2014 - 10:43 | 4387714 unplugged
unplugged's picture

they also need a channel to soak up all the foreign-owned (ie, China) treasuries that will be coming home en masse soon

Fri, 01/31/2014 - 10:47 | 4387726 NoWayJose
NoWayJose's picture

In today's world, savings are a bad thing.  Savings earn almost no interest (sounds like gold, huh?).  Savings sit in an electronic and paper world, and wait for government confiscation or dollar devaluation.  Having savings also prevents you from qualifying for many government freebie programs.  It is actually much 'safer' to use your savings to buy beans, bullets, and bullion - or even to stock up on toilet paper and other necessities.

Fri, 01/31/2014 - 10:47 | 4387727 Billy Sol Estes
Billy Sol Estes's picture

ZIRP and NIRP

Fri, 01/31/2014 - 10:57 | 4387745 roadhazard
roadhazard's picture

Why save at all. Tyler's all agree paper money will go to zero anyway.

Party on Garth

Fri, 01/31/2014 - 11:33 | 4387771 29.5 hours
29.5 hours's picture

 

 

"As of December 31, 2013 total personal savings left are down to $495 billion"

But savings are essential to future income and capital accumulation, right?  How much can we get for 495 billion dollars at 0% interest?

 

 

 

Fri, 01/31/2014 - 11:09 | 4387797 Smegley Wanxalot
Smegley Wanxalot's picture

This is why we need to justify to the banks why we need our money like at HSBC or in Russia, or we shouldn't have access to our money ever again.  If we all went to the bank and said "I need $46 billion to buy Christmas gifts" they'd say "no, you don't - now go away" and because they are the experts and know better, society will be improved.

Sat, 02/01/2014 - 15:50 | 4391667 rjs
rjs's picture

you have a couple errors here...first of all, the $46 billion is how much less we saved, not how much we dug into savings to spend...and furthermore, that's at an annual rate, so the actual figure for December is much less...

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