Personal Saving Rate.pdf

Personal saving in the US has a significant impact on the economy, with the personal saving rate being the ratio of total personal saving to disposable income. The rate was disrupted by the COVID-19 pandemic, resulting in a rapid increase and subsequent decrease. A higher saving rate implies lower current consumption but higher future consumption, while a lower saving rate implies higher current consumption but lower future consumption. In the short term, a rising personal saving rate can slow economic activity, while a falling saving rate may result in faster economic growth. In the long term, a higher saving rate can lead to higher levels of economic output, as savings are invested in businesses to finance new investments. The personal saving rate is measured by the Bureau of Economic Analysis, but alternative measures show that many households, particularly lower-income households, struggle to save. Trends in personal saving have generally trended downward since the 1970s, but rebounded partially after the 2007-2009 financial crisis and spiked during the COVID-19 pandemic.