by Mish Shedlock, Mish Talk:
Personal savings and the savings rate have plunged rapidly. Adjusted for inflation, its worse.
The BEA’s Personal Income and Outlays report for April shows the Personal saving was $815.3 billion in April and the personal saving rate—personal saving as a percentage of disposable personal income—was 4.4 percent.
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Real Disposable Personal Income (DPI) increased less than 0.1 percent in April but Real Personal Consumption Expenditures (PCE ) spending increased 0.7 percent.
Real wages did not keep up with spending.
Personal Savings Rate and Real Personal Savings Rate
- Personal Savings: $815 Billion
- Real Personal Savings: $672 Billion
- Personal Savings Rate: 4.4 Percent
- Real Personal Savings Rate: 3.6 Percent
These numbers would look much worse if adjusted by the CPI rather than the PCE price index.