Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

US Saving Rate Jumps to Seven-Month High on ‘Cloudy’ Outlook

Published 01/28/2023, 12:30 AM
Updated 01/28/2023, 12:30 AM
© Reuters.

© Reuters.

(Bloomberg) -- Americans stashed more money away last month, pulling back on discretionary spending amid a cloudier economic outlook. 

The saving rate rose for a third month to 3.4% in December, the highest level in seven months, according to Commerce Department data out Friday. Last month’s increase from 2.9% in November marked the biggest jump since July 2021, the report showed.

Savings are creeping back up after steady declines in the second part of 2021 and in 2022 as the economy reopened and Americans started spending again on services — including restaurants and travel. 

“The saving rate typically falls late in economic expansions as consumers borrow to sustain spending, then rises as they lose access to credit and turn more cautious on discretionary spending,” Comerica (NYSE:CMA) Bank Chief Economist Bill Adams wrote in a note.

Friday’s report also showed real personal spending continued to retreat last month. The decline was led mainly by goods categories, while services spending stagnated.  

“Prospects for consumer spending are cloudy,” Lydia Boussour, senior economist at EY Parthenon, said in a note. “Eroded personal savings and increased reliance on credit point to weak consumer spending this winter.”

Today’s rate remains well below the record highs at the beginning of the pandemic, when millions worked from home and received Covid-relief funds.   

©2023 Bloomberg L.P.

 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.