Rising Saving Rate Does Not Signal Renewed Consumer Retrenchment
Richard Berner at Morgan Stanley writes in a Global Economic Forum article that while there's been a recent increase in the personal savings rate in the US, and that a "change in consumer behavior is underway, one involving a slow return to thrift, ...it won't be large enough or soon enough to finance huge US budget deficits. And weakness in US consumer spending is not likely to be offset by a major pick-up in consumption abroad soon enough to help rebalance the global economy." He explains that the US budget deficit will continue to be a concern to the economy well into our future with no forseeable long-term resolution.
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by H. Shawn Xu on 7/13/2009