Savings Rate

Is America In Terminal Decline?

"The cut-off point is 2009... Before that, borrowing could create the illusion of a rising standard of living. Those days are gone. And it’s very hard to see, when you take a good look, what could make them come back."

The Disconcerting Message Behind The Plummeting Savings Rate

We don’t disagree with Citi’s conclusion that the savings rate can keep on falling. However, we strongly disagree that it’s a function of “healthy consumer metrics”. In contrast, it’s a horrendous reflection of the creeping erosion in living standards across the broad swath of the population.

UBS Makes A Striking Discovery: Ex-Energy, US GDP Growth Is The Slowest Since 2010

According to UBS, global growth acceleration in 2017 was largely a commodity bounce, and nowhere more so perhaps than in the US which was 20% of the global growth improvement but, again entirely energy investment. Once you strip that out 'underlying' growth is only 1% or so (ex inventories) - the slowest since 2010! 

The Savings Rate Conundrum

"With the average American still living well beyond their means, the reality is that economic growth will remain mired at lower levels as savings continue to be diverted from productive investment into debt service."

What Spending On 'Vice' Really Says About Retail Sales

"Major bellwether industries for the retail consumer are showing signs of distress. The upcoming holiday season will help… but most consumers are already maxed out. They can’t NOT buy their friends and family holiday presents. After that... who knows when they’ll make those big purchases again."

Real Personal Spending Drops Most Since Jan 2016

Growth in income and spending has been trending slower for the last six months and August showed continued weakness in spending (slowest annual growth since Aug 2016) but a slight uptick in incomes. The savings rate was unchanged at 3.6% - the lowest since December - but perhaps most noteworthy is the 0.1% MoM drop in real personal spending, the weakest since Jan 2016.

"Solid Footing"... How Is The Average Joe Really Doing?

"Overall, the U.S. economy remains on solid footing, against the backdrop of the first synchronized global economic growth we have seen in many years and accommodative financial conditions..." - Brainard