U.S. personal savings rate plunges to 10-year low, consumer spending jumps

Since the mid-1980s, the personal savings rate in the United States has only hit the double-digit mark once, and that was in 2013 when it topped 11 percent. For the most part, the personal savings rate has been around a mere five percent.

As anyone on CNBC will tell you, the national economy is based on consumption rather than saving. To those talking heads, consumers need to spend, baby, spend to keep the false economy booming.

Despite the Great Recession still fresh in our minds, consumers are still spending and are still not saving.

According to the latest figures from the Department of Commerce’s Bureau of Economic Analysis (BEA), the U.S. savings rate plunged to a 10-year low of three percent. The last time it was this low was when George W. Bush was president, Donald Trump was still hosting “The Apprentice” and the Boston Red Sox just won the World Series.

The personal savings rate has been crashing over the last two years, and there is no sign in sight that it is slowing down.

Meanwhile, consumer spending surged one percent month-over-month in September, which is the biggest monthly jump since August 2009, when then-President Barack Obama’s economic stimulus package was in effect.

Interestingly enough, consumers are spending like there is no tomorrow even with flat incomes.

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