Question of the Day: What was the U.S. personal savings rate in March 2022 compared to March 2021?
There was a HUGE change over the last year...
Answer: 6.2% (a 21.4% DECREASE)
Questions:
- Why did the personal savings rate decrease so drastically from 2021 to 2022?
- In what other areas might people’s money be going if they’re not saving as much as they once were?
- What do you think is a good saving target to aim for personally?
Behind the numbers (Money):
"To afford higher priced goods [sic] consumers tapped into their meager savings, plunging the savings rate to its lowest level since Dec. 2013,” tweeted Peter Schiff, chief economist at the investment firm Euro Pacific Capital.
The department defines the personal saving rate as the percentage people save of their disposable income after taxes. In its report, the department said Americans’ incomes grew in March but did not keep up with the increased pace of their spending.
This uptick was due in part to soaring gasoline and food expenses, largely mirroring the Labor Department's latest inflation report. In March, the inflation rate hit a 41-year high at 8.5%, significantly more than the 2% rate the federal government typically prefers. Skyrocketing prices for gas, groceries and housing were key contributors.
Economists note that since spending is outpacing income gains, Americans are dipping into their savings to bridge the gap, thus pushing the saving rate down. March marked the third month in a row where the saving rate fell below the pre-pandemic average of 7.5%.
For a while, the plummeting saving rate was actually hailed as a sign of the U.S. economy returning to normal."
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NGPF has lots of resources focused on Saving. Check them out here.
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About the Author
Ryan Wood
Ryan grew up with and maintains a love for learning. He graduated from the University of Wisconsin-Green Bay with a degree in Business Administration and worked in sports marketing for a number of years. After living in Texas, Colorado, Tennessee, and Minnesota, the call of education eventually brought Ryan back to his home state of Wisconsin where he was a Business and Marketing teacher for three years. In his free time he likes to spend time with his wife and daughter, play basketball, read, and go fishing. Now with NGPF, Ryan is excited to help teachers lead the most important course their students will ever take.
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