The Ladder

http://www.calculatedriskblog.com/2009/12/november-pce-and-saving-rate.html

The BEA is out with November's numbers on Personal Income and Outlays, including the new personal savings numbers. While the personal savings amount increased slightly--to $525.1 billion from $516.7 billion--from October to November, the rate stays essentially flat at 4.7%.

Calculated Risk has a pretty graph showing the recent trend, reprinted here, which shows the trend for the year. CR also guesses that we might see personal savings reach as high as 8%. I'm skeptical that we'll see numbers that high, and skeptical that even these numbers are here to stay without more policy interventions to promote saving in the long run. However, I'd be delighted to be wrong.

This also provides an opportunity to highlight a nice piece from Ron Lieber of the New York Times that ran last weekend, that highlights some of the causes of the run up in savings and nicely details the conflicting pressures on individuals and households when it comes to saving:

"The federal government is encouraging more savings by, for example, allowing people to turn their federal tax refunds into a savings bond. But then there are also initiatives under way or in the works to get people to spend money on cars, appliances or weatherproofing."

January will provide us with our final look at saving in 2009, and it will be interesting to see the impact of the Holiday season on personal savings. Regardless of those numbers, one of the bright spots of this year will be the increase in personal savings, and the question going forward will remain whether or not this is a product of necessity in the short-term or a marker of new, long-term behavior.