CAMBRIDGE – The household saving rate in the United States has tripled in the past three years. Why? And what does it mean for the US economy and the rest of the world?
The rapid rise in saving has reduced consumer spending, slowing the pace of GDP growth in 2009 and in early 2010. If the saving rate continues to rise rapidly, it could push America’s fragile economy into another downturn. That would mean lower imports, creating a potential problem for countries that depend for their employment on exporting to the US.