Americans’ Savings Rate and Real Disposable Income Fall in February

Craig Bannister | March 29, 2024
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Both inflation-adjusted (“Real”) Disposable Personal Income (DPI) and the average American’s personal savings rate declined sharply in February, data released Friday by the U.S. Bureau of Economic Analysis (BEA) show.

Seasonally-adjusted Disposable Personal Income, rose 0.2 percent in February, recording the slowest month-to-month growth since last October (also 0.2 percent).

In real terms, however, disposable personal income (personal income less personal current taxes), declined 0.1 percent, based on chained (2017) dollars. Real DPI had been rising at a decreasing rate (month-to-month), from 0.4 in November, to 0.2 in December, to 0.0 in January, before February’s decline.

Real Personal Consumption Expenditures (PCE) rose 0.4 percent, following January’s 0.2 percent drop and December’s 0.5 percent rise.

With real disposable income down and expenditures up, Americans’ personal savings rate fell to the lowest level in more than two years. On January 1, 2024, the savings rate was 4.1 percent. By February 1, it had dropped to 3.6 percent – the lowest savings rate since it was 3.4 percent on December 1, 2022.

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