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Personal Saving RateDelayed Consumption

Federal Reserve Bank of San FranciscoEconomic Education Group

Date last updated: June 10, 2013

Saving Rate – Did You Know?

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By 2000 personal saving (as a percent of disposable income) had dropped to 30% of its 1980 rate.

1980 1990 2000 20102

4

6

8

10

129.8

6.5

2.9

5.1

Personal Saving Rate

Definitio

n

•The saving rate is personal saving as a percentage of disposable income

•Personal saving is personal income (like wages or salary) minus spending

•Disposable income is personal income minus taxes

Calculation

•The most common measure of the U.S. personal saving rate is based on the National Income and Product Accounts (NIPA)• NIPA is also used to calculate gross domestic product (GDP) and gross domestic income (GDI)

Relationship

•Personal saving reflects a tradeoff between current and future consumption

•Increased current saving reduces current consumption and enables future consumption

Sources: Bureau of Economic Analysis& FRBSF calculations

http://www.frbsf.org/education/teachers/datapost/index.html FRBSF Economic Education Group

2000 2002 2004 2006 2008 2010 20120

1

2

3

4

5

6

7

8

9

Source: Bureau of Economic Analysis

http://www.frbsf.org/education/teachers/datapost/index.html FRBSF Economic Education Group DataPost

Personal Saving Rate (%)Seasonally adjusted values, Jan. 2000 – Apr. 2013

2000 2002 2004 2006 2008 2010 20120

1

2

3

4

5

6

7

8

9

Source: Bureau of Economic Analysis

http://www.frbsf.org/education/teachers/datapost/index.html FRBSF Economic Education Group DataPost

Households often save more during a recession.

During the latest recession, the average saving rate was 5.3% compared to an average 2.7% during the 2001 recession

Annotated Chart NotesPersonal Saving Rate (%)

Seasonally adjusted values, Jan. 2000 – Apr. 2013

What Do You Think?1. What was your personal saving rate last month?

A. Within a given month, add up all earnings, taxes paid, and expenses to calculate your personal saving rate:

2. Compare your personal saving rate with the U.S. average in 2012.

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(Disposable Income – Spending)Disposable Income

X 100

http://www.frbsf.org/education/teachers/datapost/index.html FRBSF Economic Education Group