This page is linked to from just before the second chart in the page
Real Dow & Real Homes & Personal Saving & Debt Burden
The content below is follow-on elaboration therefrom. See Other (at the end of this page) for data sourcing for this chart:
After 2001, there were two occasions of outlying data, each explicable as a non-recurring exception due to: Microsoft Corp. special dividend, 12/2004; 2008 Economic Stimulus Payment, 5,6,7/2008 (mostly saved, see Other). These outlying data in the preceding chart were adjusted to equal the average of the bracketing months, and shown as white diamonds, to give the following chart.
In recent months, % Personal Saving has broken sharply upward. For 6/2009, the last three months moving average was the highest in 10-plus years. During 8/2008-6/2009, the large upslope was +10%/3.1 yr.
For 1950-2008, the trace of annual % Personal Saving here consists just of two successive, jagged, linear, long trends. The first is ca. 7% climbing over nearly 3.5 decades to ca. 9%; slope = +10%/170. yr. The second is ca. 8.0% falling over ca. 2.0 decades to ca. 2.0%; slope = –10%/33. yr.
Future?
IF the recent months' break sharply upward should prove to be the beginning of a 'new behavior' of elevated % Personal Saving, how high might that percent be? I look to the history of % Personal Saving for 'makes sense' guidance.
I reject for this purpose the above 2-plus decades second trend because:
(1) It was in part contemporaneous with home prices and stock prices (expressed in consumer purchasing power) far above extrapolated historical trends.
(2) It was accompanied by doubling of the household debt/income ratio after 25 years in the narrow range 0.52 - 0.60.
(3) It ends in very low % Personal Saving.
(4) It ends in Great Depression threat crisis.
The above nearly 3.5 decades first trend of low slope was so nearly constant for so long -- as to suggest "it's right". This first trend averaged ca. 8% -- its average =8%, or its 1984 end =9%, or its extrapolation to 2008 =10% offer themselves as candidates for a 'new behavior' of elevated % Personal Saving. The middle one is ca. 9%.
Other
For Personal Saving in the top chart, data sourced 8/20/2009 from Table 2.6. Personal Income and Its Disposition, Monthly (M) Last Revised 8/17/09 of U.S. Department of Commerce Bureau of Economic Analysis National Economic Accounts National Income and Product Accounts Table at http://www.bea.gov/national/nipaweb/SelectTable.asp?Selected=3 My calculated Personal Saving as % of Personal Income (line 28 is different: % of Disposable Personal Income) equals line 27, Personal saving divided by line 1, Personal income multiplied by 100. Most of the 2008 Economic Stimulus Payment was saved, see here: http://blogs.wsj.com/economics/2008/08/07/economists-most-stimulus-went-into-savings/ www.aeaweb.org/annual_mtg_papers/2009/retrieve.php?pdfid=294 |
