January 31, 2006
OOPS, NEVERMIND:
Negative savings rate debunked (Neil Murray, 1/09/06, Canoe Network)
Despite what bearish commentators may be telling you about the health of the US economy, the notion that US consumers are spending more than they are earning after-tax is an "old wives tale" – say some economists.Posted by Orrin Judd at January 31, 2006 8:42 AMThe best measure of household savings in the US is the Federal Reserve’s Quarterly Flow of Funds Accounts, says Claymore’s Chief Economist, Brian Wesbury. According to this data US households had $62.5 trillion in assets at the end of September, $11.4 trillion in liabilities and a net worth of $51.1 trillion.
"This is a record level and $5 trillion more than a year earlier", Wesbury exclaimed in a note to clients on January 2, 2006.
Of the increase, financial assets improved by $3.3 trillion suggesting that US households may be one of the best, not worse, savers in the world.
But soon worthless stocks will be burned to heat worthless houses and the goldbugs will be Kings. Kings, I tell you.
Posted by: David Cohen at January 31, 2006 10:59 AMPeople are paying down/off their CCs, too!
Posted by: Sandy P at January 31, 2006 10:59 AMUsing a lowball number of two persons per household and a U.S. population of 300 million, the 51.1 trillion household income figure averages out to about $340,000 per household when home value is factored in. Desperate financial times indeed.
Posted by: John at January 31, 2006 1:01 PM