Personal Savings Rate Negative.... Again
Can this be considered news anymore? Seems the American Consumer has no need to save money anymore.
U.S. Nov. Personal Spending Rises 0.3%; Core Prices Up 0.1%
Because the rise in spending matched the increase in incomes, the savings rate held at a minus 0.2 percent for a second month. A negative rate suggests consumers are dipping into savings to maintain spending.
Why bother saving? You'd be a fool. Save for a home down payment? Don't need one anymore. Save money for a car? No money down lease! Save money for retirement? Nah, we'll just sell our house and retire on the gains. Save for college expenses? Let the kids take out their own student loans.
PERSONAL INCOME AND OUTLAYS: NOVEMBER 2005
Personal Savings Rate
April -0.2%
May 0.0%
June -0.6%
July -1.4%
August -3.4%
September -0.5%
October -0.2%
November -0.2%
By the way, past months numbers are being sharply revised downwards. The preliminary for August was something on the order of only -0.7% when it was initially released as a preliminary number. It's since been revised downward, first to -2.2% and again to -3.4%. So if the last two months numbers are starting to look benign, I'd wait to see whether or not these are significantly revised downward in the future as well.
Eight months most certainly makes a trend.
Caveat Emptor,
Grim
U.S. Nov. Personal Spending Rises 0.3%; Core Prices Up 0.1%
Because the rise in spending matched the increase in incomes, the savings rate held at a minus 0.2 percent for a second month. A negative rate suggests consumers are dipping into savings to maintain spending.
Why bother saving? You'd be a fool. Save for a home down payment? Don't need one anymore. Save money for a car? No money down lease! Save money for retirement? Nah, we'll just sell our house and retire on the gains. Save for college expenses? Let the kids take out their own student loans.
PERSONAL INCOME AND OUTLAYS: NOVEMBER 2005
Personal Savings Rate
April -0.2%
May 0.0%
June -0.6%
July -1.4%
August -3.4%
September -0.5%
October -0.2%
November -0.2%
By the way, past months numbers are being sharply revised downwards. The preliminary for August was something on the order of only -0.7% when it was initially released as a preliminary number. It's since been revised downward, first to -2.2% and again to -3.4%. So if the last two months numbers are starting to look benign, I'd wait to see whether or not these are significantly revised downward in the future as well.
Eight months most certainly makes a trend.
Caveat Emptor,
Grim
2 Comments:
Know someone who is in over his head and has been borrowing from equity line to stay afloat. Thinks after all borrowing still ahead. Told him to unload the property before it tanks and he goes bankrupt.Hope he gets out in time. Lots of people going to get hurt in this Housing bust.
Never ever seen so many people sign their life away to own a POS shack that is insanely priced.
Buyers need to wise up and just say that's it. No bids no nothing until we get "substantial" price drops of at least 25% +.
Income are not going up while taxes energy and cost of living continues to increase. This is truly a recipe for disaster. many are not fully aware that a financial trainwreck is heading their way.
The prudent sane and rational people will be rewarded for their patience.
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