BJK Research


Personal Savings Rate: Graph of the Week 10/1/2012

The Graph of the Week shows the persoanl savinggs rate, defined as the amount of personal savings divided by disposable personal income. The graph runs from 1960 Quarter 1 through 2012 Quarter 2.

Personal Savings Rate

The data comes from the National Income and Product Accounts from the Bureau of Economic Analysis, downloaded from FRED, the St. Louis Fed's Economic Database.

The average over this entire time period is 6.9%, but that is a little misleading in that we haven't had a personal savings rate that high since the fourth quarter of 1992. It was higher than that for almost the entire period before that, and lower for the entire time since then. The lowest it has ever been was 1.3% in the second quarter of 2005. People didn't think they would need to save then, because they assumed the value of their home was headed to infinity, and they could just take out home equity loans if they needed funds. They were wrong.

The highest it has ever been was 12.4% in the second quarter of 1974. The rate tends to jump during recessions, presumably because people realize that rainy days had come, and they better start savings.

Graph of the Week InSdex





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