The Savings Rate is now approaching the 50 year average of 6.9% and will very likely head above that over the next few years as the pendulum swings in the other direction as it got as low as .8% in Apr ‘05. One hand, higher savings will put a crimp on consumer spending which of course makes up a majority of US GDP but on the other, higher savings is the fuel for investment which helps to finance businesses everywhere that are getting crowded out in their borrowing by the enormous needs of the US gov’t and some European ones.
Source: BEA
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