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Americans Raid Savings in September
By Dave Skidmore Associated Press Writer Monday, November 2, 1998; 8:41 a.m. EST
WASHINGTON (AP) -- Income growth slowed to a crawl in September but Americans dipped into their savings and kept right on
spending.
The savings rate -- savings as a percentage of after-tax income -- was minus 0.2 percent, the worst performance since 1959 when
the government began tracking the rate on a monthly basis, the Commerce Department said today.
On an annual basis, the rate hasn't been negative since the Depression year of 1938.
So far this year, the savings rate has been running at a positive 0.6 percent, down from 2.1 percent in 1997 and 2.9 percent in 1996.
Negative saving occurs, the department said, when consumers finance spending through credit cards, home equity credit lines and
other loans, by selling stocks or other investments or by using past savings.
Americans were able to dip into savings in September, in part, because many have seen the booming stock market increase their
wealth. Recent stock declines have only partly eroded that wealth.
In September, personal incomes, before taxes, rose a modest 0.2 percent to a seasonally adjusted annual rate of $7.17 trillion.
There hasn't been a smaller increase since November 1994 -- nearly four years ago. There also was a 0.2 percent rise in after-tax, or
disposable, income.
Spending, however, increased a robust 0.5 percent to a seasonally adjusted annual rate of $5.87 trillion. |
