A Quarter Trillion Dollars In US Savings Was Just "Wiped Away"

As part of its historical revision to GDP, the BEA also had to adjust personal income and spending, with the full results released in today's July report. What it revealed was striking: over the revised period, disposable personal income for US household was slashed cumulatively by over $120 billion to just under $14.4 trillion, while spending was revised higher by $105 billion, to just above $13.8 trillion. There were two immediate consequences of this result.

First, as the following table shows, while government pay has remained roughly flat over the past 3 years, growing in the mid-2% to mid 3% range, wages and salaries for private workers have been steadily declining as the blue line below shows, and after hitting a 4% Y/Y growth in February, wage growth has slumped to just 2.5% in June, the lowest since January 2014 when excluding the one-time sharp swoon observed at the end of 2016.


But a more troubling aspect of today's revision is what the drop in income and burst in spending means for the average household's bank account: following the latest annual revision, what until last month was a 5.5% personal saving rate was revised sharply lower as a result of the ongoing downward historical adjustment to personal income and upward adjustment to spending, to only 3.8%.

In dollar terms, this revision means that a quarter trillion dollars, or $226.3 billion, in savings was just "wiped away" from US households - if only in some computer deep in the bowels of the BEA buildings -  who as a result have that much less purchasing power, and following the revision the total personal saving in the US as calculated by the BEA is now down to only $546 billion, down from $791 billion before the revision.

This means that either households will have to incur this much incremental debt to continue on the previous spending "trendline", or a quarter trillion in potential growth from the future economy (recall 70% of US GDP is the result of consumer spending), has just been chopped off.



Manthong Oldwood Tue, 08/01/2017 - 11:18 Permalink

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OK, I am reasonable… I only demand a half billion or so  of it back into my checking account. It worked for the Awans… it should work for me.

In reply to by Oldwood

Save_America1st Eager Beaver Tue, 08/01/2017 - 16:15 Permalink

given that these are government numbers I still don't believe them even if they've been revised down that much...I'd guess they even lied on the revision and that the true numbers are much lower.  They lie so much and have lied for so long that they don't even know or understand that they don't use the correct stats anymore anyways.Do they even take into consideration the massive devaluation of the dollar over the last 100+ years and the current rates of inflation?  Do they even know how to calculate inflation anymore? The FED scum continually lament about inflation being around the "2%" range when that is always clearly a fucking lie.  The more true CIP is always calculated by John Williams of Shadow Stats:  http://www.shadowstats.com/alternate_data/inflation-chartsHow about lost interest on savings after all these years of zero or near negative interests rates? How about the fact that most people in the U.S. are living on a whole lotta bad credit debt and don't have even 500 bucks cash on-hand for emergencies.How about that most people, maybe 90 to 95% of Americans don't own even 1 ounce of silver for a rainy day?How about that even less people have any understanding at all about cryptos like BTC, ETH, etc. or have even a small fraction of some money allocated into cryptos just as another type of hedge?How about that most people who do have investments have them in fake bloated stawks that they don't even actually own that are nothing but digits on a website right now and that when the next major market correction of 5, 10, or 20% occurs it will wipe out many of those "wealthy" paper tigers out there.  You can't eat Amazon stocks, bitchez. Say goodbye to those already destroyed pensions and good luck ever getting anything out of those 401k's if you're currently under 60 years old.  And if you are, I'd highly recommend liquidating that shit now and start stackin' phyzz.Take all that into account and if anyone reading this is part of the vast majority of those who don't have assets allocated outside the bankster system at this point, well then you folks damn well better start stackin' cuz time's running out very quickly for those who aren't prepared when the SHTF.just sayin'...

In reply to by Eager Beaver

NoPension 847328_3527 Tue, 08/01/2017 - 19:54 Permalink

Until something happens.....and a few..say 10-15% decide now is the time to "cash out". Watch those paper gazillions then. It's all fake. We know it. They know it. Everybody knows it. But try to "get it out " and buy stuff.

It's really basically the same issue with crypto. You might have 3 million in BC, but try converting it into something you can buy a house or car with. And at the same time, explain to your Uncle why he didn't get his cut.

In reply to by 847328_3527

Ex-Oligarch JRobby Tue, 08/01/2017 - 17:29 Permalink

At this point, is there really any utility to articles like this one that base their analyses on US government statistics?  The numbers are revised up or down over and over again, depending on whatever propaganda narrative the shameless statisticians are trying to sell the public at the moment.  It's all fiction, and nobody benefits by producing analyses that treat the fiction as fact.  All that process accomplishes is to reinforce the illusion that the bogus data is worthy of serious consideration.By all means, Tylers, please keep us informed when the feds revise the data to cook the books -- but there's no need to analyse the latest set of lies as if they reflect some sort of objective reality.

In reply to by JRobby

chubbar Truther Tue, 08/01/2017 - 13:11 Permalink

OT, and under the banner "you've got to be fucking kidding me"! Here is an excerpt from an article I just read:"With the naming of “Obamacare” a little known piece of legislation was tucked in stating that “expenses and royalties associated with naming the bill” would be paid out. Until it was renamed the Affordable Care Act, these “royalties and expenses” totaled $411 million…And guess who they got paid to?It is an inarguable fact that former President, Barack Obama, has been known in his life as Barry Soetoro; this stems from the time he moved to Indonesia with his mother’s second husband, Lolo Soetoro. Barack was enrolled in school under this name and continued to use it for some time on his return to the United States at the age of 10.  Of the monies paid for “royalties and expenses” it seems “$400 million was transferred discreetly to accounts offshore to Barry Soetoro, LLC, a legal entity operating out of three foreign countries.” The accounts have funds in the Cayman Islands, Caledonia, and Ireland; what this means is that it is not paying tax in the US…It works out to around $170 million not in the public coffers......"http://investmentwatchblog.com/why-no-media-response-on-barry-soetoros-400-million-in-offshore-accounts/This is incredible, if true.

In reply to by Truther

hardmedicine chubbar Tue, 08/01/2017 - 15:40 Permalink

It is illegal for any president or person holding public office to "BE ENRICHED" by their holdin of that said office.  They have been trying to get Trump on this one...... so if this is in fact true it would be wonderfully bizarre.  Still I think Obama could murder someone on live TV with video feed back up and he would get away with it without a word said......... so there's that

In reply to by chubbar

Okienomics hardmedicine Tue, 08/01/2017 - 19:12 Permalink

MORE FAKE NEWS this time pointed at Obama.  Geezus, guys, do a little homework before spouting B.S.  Yeah, I know, why let facts get in the way of a good outrage.In January 2017 the Last Line of Defense web site published an article reporting that President Obama trademarked the term “Obamacare” and had since racked up millions of dollars in royalties from its use by the U.S. government.There was no truth to the article. The Last Line of Defense has a history of publishing fake news stories, and the web site carries a disclaimer stating that its content is not factual.

In reply to by hardmedicine

Lets Buy The Dip Truther Wed, 08/02/2017 - 00:28 Permalink

screw that FIAT crap. I say jump on the digital coins train. 1) checkout the ST blog2) These guys called the bull market backin 2009 2 days early, and very very accurate. 3) Their newsletter here - is very accurate and telling how ETH could be $400 by XMAs and BITCOIN going past $3200 soon. 4) They touched on BITCOIN - click here. And told their members to jump in when it was $30 bucks. They were laughed at. Now look at the price. I think folk or no folk these currencies dip every 6 months, only to be bought back several months later to the highs. Serious pattern there, for people with lots of money at their disposal. 

In reply to by Truther