On the day before Thanksgiving the nation’s economists gave us all tidbits to evoke the giving of thanks. Not slabs of good news, slathered with high percentage sauce. Not a full meal, just a snack. The economy grew, the number of workers applying for unemployment benefits fell. Income rose a tad. So did spending. But orders for capital goods, things like building cranes and steel girders, fell. So did sales of new homes, even though home prices dropped to the lowest point in seven years.
Maybe the best news from some perspectives was that Americans saved 5.7 percent of their disposable income in October, which was up from 5.6 percent in September. Before the recession, the savings rate was just a smidgen over 1 percent. This means that the average family is now (1) paying down debt; and (2) building up savings so that the next recession won’t catch them as un-prepared as this one did.
A high savings rate won’t be seen as great news by economists raring to see consumer spending rise. But old-fashioned types such as this editor will allow themselves a smile of satisfaction when they learn that at least some of the population has slowed down on spending and started to save.