This is some kind of sick joke, they are taking paper profits of financial assets into account to calculate savings rate. Pathetic!!!
I assume Social Security deductions, 401k contributions, and mortgage payments to the principal are now considered savings then.
My point is there is no real effort to determine if any money is going into or out of cd's, savings, IRA's etc...As I said, the released figure is nothing more than wages minus spending for a given month. There is no analysis of the data at all. If wages go up .04% and spending goes up .05% for the month, then the data says we have "negative savings" by .01%. Never mind that actual savings could have been greater if people are putting more of their wages into savings. Does anyone else see how flawed this is?
Personal savings is similar in nature to a company's income statement. It tells us whether Americans -- as a group -- had a profit or loss for a given quarter based on their cash activity. During Q2 2005, Q3 2005 and Q4 2005 we had "net losses" as reported by the Department of Commerce, which is why some people state that our personal savings rate is negative. Whether we're discussing the financial statements of companies or people, art and science are both needed to create -- and interpret -- the numbers. Furthermore, it is often not prudent to draw conclusions by looking at only a few figures from a couple reporting periods. I have no quarrel about the math used to calculate our personal savings rate, and I'm willing to concede that that rate is currently negative. It is, however, a statistic that doesn't seem to mean much standing by itself; our negative savings rate is probably attracting more attention than it deserves.