Economics
Why the Savings Rate Is a Reason to Worry About 2018 U.S. Growth
- It’s back down at 2007 levels, fourth-quarter GDP data showed
- It can’t fall forever, and ‘as the consumer goes, so goes GDP’
This article is for subscribers only.
American economic growth is proving solid and broad, but a warning signal may be flashing under the surface: personal savings as a share of disposable income is falling rapidly.
That’s important, because consumers make up roughly 70 percent of the economy and are a key driver of economic growth, and they can only push savings down so far before it hampers their ability to keep spending more. If their shopping plateaus or advances more slowly, that could curb how fast the overall economy can expand.