US savings rate drops to record low

["Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx>]

US savings rate drops to record low
                    By Peronet Despeignes in Washington
FT  September 29 2000 14:16GMT

                    America's savings rate hit another record low in
August, the Commerce department said on Friday. It said increases in
personal spending outran the growth of after-tax income for the third
straight month, reducing the savings rate.

                    Personal incomes rose 0.4 per cent to an annual rate
of $8,338bn in August, with after-tax incomes rising 0.3 per cent to
$6,541bn. But spending rose a faster 0.6 per cent to $6,818bn, so the
savings rate fell to a new record low of -0.4 per cent of after-tax
incomes.

                    In other words, consumers spent all of the increase
in their after-tax incomes - and more - by either borrowing, selling off
investments or depleting savings. The figures are adjusted for seasonal
fluctuations, but not for inflation.