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Americans Are Saving More Money
All it took was a financial crisis followed by a recession to get Americans to start pocketing their cash. Americans are saving more money now than at any time since February 1995, The Wall Street Journal reports.
According to the Commerce Department, personal saving rose to 5.7% of after-tax income in April. That’s up from 4.5% in March. A year ago, the savings rate was a big fat zero. President Obama’s stimulus package helped, as it started adding a few more dollars in most Americans’ weekly paychecks.
This switch to saving would make your mother proud. But is increased saving actually a good thing? More spending is what will help jump-start the economy, and all this saving — while good for personal bank accounts — could be getting in the way of a recovery.
Keep in mind that the credit markets have a direct impact on the savings rate as well. More credit means more spending and less saving. The credit markets have dried up, and more saving is a natural result of that.
Photo by dlnny.
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Jaclyn on June 11th, 2009 2:21 pm
It is about time that americans start saving their money. This is something that people should have been doing all along even when times were good. Think about, look at how much money they are putting away now during rough times, and then think about how much money they could have been putting away when times were good…just imagine how much more they would have had by now.
RedHotFranchises on June 11th, 2009 10:06 pm
We have just ended an era where people spent without actually having money to a point in time where people spend what they have. Its not the end of the age of consumerism–it is the beginning of more thoughtful approach to spending and what is value.
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