Much has been made of the recent uptick Americans' savings rate. The Commerce Department reported Monday that consumers saved $378.6 billion in December, up from $299.1 billion in November. As a percentage of disposable income, the rate went up to 3.6 percent from 2.8 percent for those two months. (The increase becomes even more apparent when you compare the 2009 third quarter savings rate of 1.2 percent to the fourth quarter's 2.9 percent.)
Newspaper headlines celebrated the resurgence of thrift, while pointing out that our lack of spending could hurt the economy further. "U.S. Thrift Hurts the Economy," read one AP headline.
But have we really transformed into a nation of savers? A closer look at the data reveals a more complicated picture. If you look at our savings rate as a percentage of gross national income, as this Bureau of Economic Analysis chart does, then you can see that the rate is still negative, at least through the third quarter of 2008, the most recent data available. The negative 1.7 net savings rate is lower than it was even in the rollicking early 2000s. (In 2000, the net savings rate as a percentage of gross national income was 5.8 percent.)
So while we might be making small changes, a nation of savers we are not.
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