2006 Personal Saving Rate Lowest in 74 Years

EastValleyTribune.com reported that the U.S. Commerce Department reported the "saving rate for all of 2006 was a negative 1 percent. The 2006 figure was lower than a negative 0.4 percent in 2005 and was the poorest showing since a negative 1.5 percent saving rate in 1933 during the Great Depression."

The saving rate has been negative for 21 consecutive months.

BEA.gov:: Personal Saving Rate Graph

Exercises
  1. Explain why negative 1 percent is "lower" than negative 0.4 percent.

  2. Give one reason as to why the personal saving rate was a negative 1.5 percent in 1933.

  3. No or Yes or Maybe: A negative personal saving rate implies some people are spending they don't have.

Related BAB

Creator: Gerald D. Thurman [gthurman@gmail.com]
Created: 01 February 2007

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