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September 02, 2005

Personal Savings Rate Worse Since 1959


Personal incomes increased 0.3% in July, while spending soared ahead by 1%. As a result, the personal savings rate tumbled to negative 0.6%, the lowest since monthly records began in 1959.
This is an economy where people can't make ends meet, where the bubble in housing prices created a bubble in personal finances that disguised that basic reality.

But as the bubble pops, we can expect an economic reckoning that could be very scary, as consumer spending collapses without the ability to tap the piggybank of home equity.

Posted by Nathan at September 2, 2005 08:32 AM