Probably the most surprising of the revisions included in the July 27 “National Income and Product Accounts Comprehensive Update” was the dramatic increase in the personal savings rate. The saving rate had been estimated at 3.2% in May 2018; now, however, the Bureau of Economic Analysis (BEA) estimates it to be more than double that, at 6.8% (chart 1). The question we ask in this week’s Economics Weekly is: what implications might this revision have with respect to how we should be viewing the current state of the U.S. consumer?
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Richard de Chazal, CFA is a London-based macroeconomist covering the U.S. economy and financial markets.