Households Hunker Down As Saving Rate Soars To Highest Since August 2011

Tyler Durden's picture

Confirming that the economy continues to be on life support and that the consumer has been actively withdrawing from providing that key lifeblood so needed to regain the "virtuous circle" [RIP: XXXX-2009] is the just released revised personal consumer data, which showed even further retrenchment, as personal spending came unchanged in June on expectations of a modest 0.1% increase, while income rose 0.5% on expectations of a 0.4% increase (among other things due to "Contributions for government social insurance -- a subtraction in calculating personal income -- increased $3.5 billion in June, compared with an increase of $0.8 billion in May."). End result: the Personal Savings Rate (revised) rose from 3.6% in April, to 4.0% in May, to 4.4%, in June: the highest it has been since August 2011, just before the economy as manifested by the Fed's favorite metric, the Russell imploded. All those expecting the consumer to step up and pick up the pieces will have to defer hope and prayer for one more month. Luckily, for everything else there is the Fed's Taxpayercard.

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Snakeeyes's picture

Call it a Grim Fandango. Milwaukee PMI also dropped to the lowest point since July 2009.

Cursive's picture

These "savings" were already spent.  The increase in the "savings rate" is spent to pay down the burgening debt that was assumed to pull demand forward.

malek's picture

Or even better a lot of these "savings" are in fact defaulted debt.

LoneStarHog's picture

The factors and computation of The Personal Savings Rate is a damn joke, just like every other so-called report.

MachoMan's picture

If I buy guns, gold, or grits (with a 20 year shelf life of course) and expect to hold them in perpetuity, then did I save?  If I spend to buy alternative forms of currency, does that show up in the computation?

lemonobrien's picture

no, just fiat is measured.

Winston of Oceania's picture

It is a much better guage of opportunity cost as the real market preserves capital and destroys debt. Deflation is the natural order of things regardless of what the Central Planners do. It is after all Natural Law that guides us through the cosmos and the market is just us...

devo's picture

Bullish for negative interest rates.


PaperBear's picture

If only these funds were put into real money – gold and silver – then this ponzi pyramid scheme would be over.

All of the dealer silver of 38.888m ounces could be acquired for $1.088 billion given it’s $28 price then where would industry and investors get the silver they want once the commercial stockpile is depleted ?

malikai's picture

I have a similar conclusion. I guess some day people will learn that "saving" is not placing cash in the bank, but rather converting cash for real money. Nevermind. This allows those in-the-know, to actually save.

MarcusLCrassus's picture

Back in the '90s TPTB basically gave Warren Buffett a death threat when he tried to corner the silver market.  Whatever they said to him, it scared him so much he immediately backed off of it and sold off the silver he did have, so until someone with b4lls enough (like Eric Sprott) to do this also has the cash to buy up a few billion dollars in silver I don't see this happening.

Bobbyrib's picture

Even if someone or a group of people/fund corner the silver market, the government will make it illegal for the common man to be holding silver that is not used for the purposes of producing products.

Bob's picture

Is this an increase in real saving or an artifact of aggregate debt paydown? 

overmedicatedundersexed's picture

go into debt big time if you can find a lender, buy PMs and promply loose them. or else have 0 debt and still buy PM's or real items..avoid any casino like the plague.

boogerbently's picture


can't get enough of that two tenths of one percent interest per year. LOL

101 years and counting's picture

savings = "sideline money"



orangedrinkandchips's picture

As a child I am sure everyone heard the story of the Grasshopper and the Ant.....


How the ant kept working and saving all summer long while the 'hopper didnt?


I'm seeing a LOT of BOOMER grasshoppers sans savings! what do you do?


It's much like the board game of Life. You get to the end and you HAVE JACK SHIT SAVED FOR RETIREMENT AND YOU CANT WORK OR FIND A JOB!


rock and hard place? scary shit.

slackrabbit's picture

Desperate people are like locusts. So long as they get their social secuirty check from your  ant pillaged palour, they won't give a shit what happens to you.

As the old saying goes 'democracy is like two wolves and one sheep voting what to have for dinner'. 

So be prepared to spread you savings in to mulitple safe places because mark my words they WILL vote to steal it from you.

They will eat and eat and eat till nothing is left, then they'll turn on each other.....just like the up comming currency wars.....everyone united...till they're not.

Let the feeding frenzy begin...

Bicycle Repairman's picture

"So long as they get their social secuirty check"

The people who get a SS check were also ants who 'saved' money with the gov't as required by law.  These ants also paid the property taxes that sent you to the gov't educational factory, so you could be turned into an ant.  The old ants didn't pay for that so you could post on the internet during working hours.  They want you to be productive and then, among a great many things, pay them back.

Totentänzerlied's picture

LOL. They wrote the laws that did all that? News to me. They did it because they're good little fucking sheep who would never even consider rocking the boat, no matter how much suffering and damage their inaction causes. Fuck them.

viahj's picture

the whole idea of "retirement" such as retirement homes (not old folks homes but the nice, smaller single family home), vacations and travel while living off of accumulated "paper wealth" and interest is only a short lived recent phenomenon and is soon to be gone.  if you're too old to work move in with your children, raise the kids and farm the back yard.  muti-generational housing will be the norm again here in the US.  get used to it and get on it.  and instal some solar panels and rain collection devices. 

slackrabbit's picture

In the end you can't make people spend. ...and where people are spending it’s on basic food items and the odd six-pack.

Certainly yours truly has been surviving ‘off and on’, on savings when not working in developing country 'hot zone'. 

Having returned from one recently, trade felt safer over there than back here in least there you knew they couldn't print cigarettes or oranges….and at least I didn’t have to look at the missile stations on the roofs next door.

I think I'll keep staking cigarettes and gold.

Bob's picture

It's all about the debt and only debt from here on out.  Misleading stats like "personal saving" only cover the truth as the standard of living continues to decline.


Michael Hudson: The Road to Debt Deflation, Debt Peonage, and Neofeudalism

orangedrinkandchips's picture

Cigs.....of course...just keep em from getting stale. I dont touch em but nicotine is the strongest drug known to none.


Not sure if this is just me, but along the lines of people not wanting to spend or being forced to spend....much like leading a horse to water.....same cant make them spend.

Anyway, I am seeing soooo many garage sales, estate sales(which is a fact of life, tudy) but PEOPLE DONT WANT MORE SHIT FROM CHINA ANYMORE....


I AM NOT A HOARDER....I CANT STAND IT...I THREW OUT SO MUCH SHIT YESTERDAY, KIDS STUFF ETC....i have to have a place to live...not with piles of shit everywhere....more shit from China!


The tide is turning....

TrumpXVI's picture

Yup.  No more discretionary spending.  All savings into gold and silver and physical cash.  This is war.  Crash the fucking system.

Jim in MN's picture

I have told my wife, 'cash only'...and I have the cash.  I give her some twenties every so often.

slackrabbit's picture

We do too, for no other reason than I don't like being target marketed.

NuYawkFrankie's picture

Re Saving Rate Soars...


Translation:  Forget plain ol' pepperoni  - the average household now has  enuf for a slice of pizza with TWO toppings!

Bicycle Repairman's picture

Then make it pepperoni and bacon!!  LOL!

847328_3527's picture

Stores are emptier then I have ever seen them.  Many are hodling on by fingertips as consumers don't even window shop anymore.  The "Consumer" may actually be morphing into that detestable creature called, "Saver."

overmedicatedundersexed's picture

fear and loathing is on the rise as one by one the" eyes wide shut "open..gestapo at airports those that awaken are agast, gov lies on employment, economic hit men in banks ..the shock could kill the patient.

Arnold Ziffel's picture


Darkness at Noon (German: Sonnenfinsternis) is a novel by the Hungarian-born British novelist Arthur Koestler.


Discussed in Neil Postman's book, "Amusing Ourselves to Death."

Winston of Oceania's picture

We must ALL decouple from the poison system of "consumerism". Plant a garden (still time even in zone 5), make your own greeting cards, start using a real cookbook and stop buying packaged foods, ANYTHING however small when added to the decoupling of your neighbors will help to crash the beast.

slackrabbit's picture


Remember when mum (grandmother) used to save the paper bags from the shopping?

Happy days are here again....

chubbar's picture

I don't think that a person not spending because he/she has no money can be called "saving".

viahj's picture

"savers" are for when times are good. 

the "consumers" are turning into "survivioralists"

RKDS's picture

For crying out loud...just look at the toy market if you want to get an idea as to why.  Hasbro's last round of TransFormers is 30% smaller and costs 40% more.  WTF is the point of window shopping when it works out to twice as much?  Everything I look at is smaller and crappier yet costs significantly more, on top of the fact that my pay's been frozen for 5 years.

Arnold Ziffel's picture

RKDS, You ain't kidd'n!

Ice cream bars are tiny...not to mention the 6 pack of tiny Snickers' Bars for $1.20 (used to be a 10-pack for 80 cents).

I am so disgusted I have begin eating healthy!

Totentänzerlied's picture

Not 'round here. Seems like everyone is either on or just returned from their latest fabulous European or Caribbean vacation. Stores are never empty, restaurants too. The sheeple are still, as if by magic, stacking various and sundry crap. Walked in the other day and someone had bought an electric pepper mill, a laptop pad with fan, and a cupcake tote (2-dozen capacity!) --- these people have absolutely no idea what's here let alone what's coming, but they do, somehow, have plenty of FRNs to piss away and quite an urge to do so.

Jim in MN's picture
US Personal Spending (Jun) M/M 0.0% vs. Exp. 0.1% (Prev. 0.0%, Rev. -0.1%)


Flat, flat, FLAT!!!



flapdoodle's picture

Not to worry! People are all saving up for their iPhone 5...

scatterbrains's picture

It's interesting watching these keynesian bankster rulers trying to maintain their empire. They know that each new dose of QE is slowly poisoning themselves as the damaging effects become ever more severe upon the masses until finally they manage to o.d. and kill themselves and the system crashes.  Once the people realize what has happened they will rebuild a system opposite of the one that destroyed them. A gold based money system at some point when this chapter ends. They must be aware of this and so perhaps they will opt for deflation for a spell in order to staved off their doom.

Clowns on Acid's picture

scatter - Exactamundo ! Let the economy go down...people screamoing for QE3 stimulus handouts just before election. Obama and DEMs provide....become the FDR type heroes.

Who will "women" vote for when the One says that he will provide for them and their children and Romney won't ?

Classic Cloward Piven tactics. Create the catastrophe, then provide the taxpayer based solution, which creates aother catastrophe and indeed another reason to provide another "solution".

It all leads to a Chavez type Gov't. The US is different however, the "people" won't accept it....until the Gov't cracks down....geez do ya think the present regime sees this coming?

Shizzmoney's picture

There's a new govt campaign out there called, "Feed the PIG".  It is meant to encourage those, especially younger people, to save.

But hopw the fuck can people save if we are in debt and our incomes are stagnant? And, no one trusts the big banks; the very ones our government says we need to prop up!  Why the fuck would anyone trust their life cash in the bank if they know whats going on?

On top of that, the mascot for the campaign is fucking creepy:

We can't save because we have debt to pay down; and people are delevering at a fast pace because we know another round of corporate layoffs are coming after the Stock Market takes its swoon (just a matter of time). We know "things aren't going to get better".

On top of that, those in the black are the ones truly "free"; the Constitution doesn't matter anymore; just your credit score in this "financialized" society.

The funny thing about the campaign?  Saving is really the Kryptonite to the Neo-Liberal Keynesian thoeries that everyone fawns Krugman over because saving is NOT good for "supply and demand".  David Cameron urged his people to save and pay down debt.....only to backtrack after his banking asshole backers like Barclays and the BoE said, "NOOOOOOOOOOOOOOOOOOO!!!!!".


phat ho's picture

"Off with their heads"  Guillotine's on special $49.99 no refund after 50 uses.

Shizzmoney's picture

Make sure those Guillotines are made in the USA.

The reason why they passed NAFTA and other globalization pacts was so if the bankers we to be guillotines, they wouldn't have to worry because they'd be made in China and would fail.

Lucius Cornelius Sulla's picture

4% is still pretty pathetic.


asteroids's picture

What savings? People having been putting everything on credit cards and happy to pay the rate!