7 ms·

U.S. net saving as a percentage of gross national income

100 points by jameslk 3y ago

function_seven 3y ago
How am I supposed to interpret this? That we're currently at the same point we were just before the 2008 GFC? Because that's how I read it, and I hope it isn't a rhyme.
- nine_zeros 3y ago
  The interpretation is that people are not saving enough. Which means personal debt is expected to rise, consumption is about to slow down, and corporations will likely see lower revenue growth that they have been used to in the past few years.
- codeTired 3y ago
  I think covid made it weird. People were hyper saving and it caused demand to build up. Then people were “fuck it” after things started to return back to normal. However, people will eventually have less money to spend.
  - chii 3y ago
    > People were hyper saving i think instead of thinking of it as saving, it's more "unable to spend". Now that they are able to spend again, they do. There was never an intentional savings spree imho.
    - rsynnott 3y ago
      It's not just "unable to spend"; public anxiety tends to cause people to put off spending.
- thatfrenchguy 3y ago
  That Americans on average have been horrible savers for a generation or two?
  - adventured 3y ago
    On average Americans have gotten dramatically richer over the past generation or two. The average American is doing far better financially than the average German or Swede. The median is the relatively ugly picture. The average American has invested a lot in housing and equities, both of which have soared over the past 20-30 years. The average wealth per adult in the US is ~$550,000. That's just behind Luxembourg for #2 in the world (led by Switzerland at $685,000). That's a shocking average figure for a nation with 250+ million adults. It's closing in on double that of Sweden, and it's 2/3 higher than the UK or France. It's well over double that of Germany. It's also far higher than very affluent Norway. The US Gini figure is also lower than Sweden now (Sweden has become one of the most unbalanced affluent societies due to their horribly failed immigration integration over the past decade or so). If you're American, you definitely want to be average (or above), not median. How about the median wealth per adult? ~$107,000 for the US. That's above Austria, Germany, Sweden, Finland, Japan, Singapore, Spain, Italy. And it's below the Netherlands, France, Canada, Norway, UK, etc. Germany's median wealth per adult is a mere $66,000. They should be asking some serious questions. Greece is at $53,000 and Portugal is at $70,000 for refence. The UK is up at $151,000, with France and Canada around the $135,000 area.
    - probablynish 3y ago
      Median net household wealth increase far more than mean net household wealth in the 2019-2022 period: https://www.federalreserve.gov/publications/files/scf23.pdf https://www.federalreserve.gov/publications/files/scf23.pdf Mean: about +22% Median: about +35% Median within the poorest 25% of households: +900% (!)
    - chiefalchemist 3y ago
      Average is deceiving. A single billionaire and 999 with zero yields an average of one million each. With so much wealth at the too, average is going to be pulled up even when there are many with relatively near zero.
      - adventured 3y ago
- JumpCrisscross 3y ago
  That the American consumer is stressed. See this comment from a quarter ago [1]. EDIT: Never mind. Personal savings are still stable [2]. Net savings included federal deficits. [1] https://news.ycombinator.com/item?id=37113568 https://news.ycombinator.com/item?id=37113568 [2] https://fred.stlouisfed.org/series/PSAVERT https://fred.stlouisfed.org/series/PSAVERT
- zyang 3y ago
  Winter is coming.
- DarkmSparks 3y ago
  in fundamental terms, the savings rate needs to be higher than the depreciation rate or the net value of the economy decreases (hard and fast) negative savings rates are hard and brutal depression territory.
jawns 3y ago
This chart is hard to interpret, because it's depicting the change in a ratio over time, without necessarily showing the trends of the underlying measurements. Thankfully, there's another chart that's linked from the first chart, representing personal savings rate: https://fred.stlouisfed.org/series/PSAVERT https://fred.stlouisfed.org/series/PSAVERT So I guess personal savings rate is falling over time (from ~10% between 1960 and 1990, to ~5% in 2000 and beyond), and gross national income is growing (and maybe even accelerating), which is why the ratio of one to the other has a more pronounced decrease. Yet I wonder how this data squares with this report from last month: "The US economy's safety net is bigger than anyone thought" https://www.businessinsider.com/us-household-savings-estimate-stronger-than-expected-economy-recession-outlook-2023-10 https://www.businessinsider.com/us-household-savings-estimat...
- umeshunni 3y ago
  1. Business Insider is a clickbait publication. You should probably find a better source for any information. 2. Savings rate is a point in time metrics -- d/dt if you wish. A safety net would be the 'area under the curve'. 3. The savings rate is dropping because of increased unemployment and increasing inflation.
  - jawns 3y ago
    This Bloomberg piece says essentially the same thing as the Business Insider article: https://www.bloomberg.com/news/articles/2023-10-10/americans-cash-stockpile-is-hundreds-of-billions-bigger-than-thought https://www.bloomberg.com/news/articles/2023-10-10/americans...
  - Eumenes 3y ago
    I like this headline on the economics page of BI: Taylor Swift and Beyoncé won't prop up the US economy much longer, with Americans' COVID-era savings running dry
  - HDThoreaun 3y ago
    Unemployment is not increasing. By any measure it is near all time lows. https://fred.stlouisfed.org/series/U6RATE https://fred.stlouisfed.org/series/U6RATE
WarOnPrivacy 3y ago
Household debt to GDP https://www.sunshineprofits.com/media/cms_page_media/2019/12/11/us-household-debt-gdp-gold.png https://www.sunshineprofits.com/media/cms_page_media/2019/12...
- mikeyouse 3y ago
  We're still near the 2000 amount - about 25% below where we were during the GFC; https://fred.stlouisfed.org/series/HDTGPDUSQ163N https://fred.stlouisfed.org/series/HDTGPDUSQ163N
  - lainga 3y ago
    How do I interpret that Q4 to Q1 sawtooth? End-of-year bonuses paying off debt?
    - mikeyouse 3y ago
      Nope - or maybe I guess - but as an input into GDP instead of debt. Non-seasonally adjusted GDP has that same pattern, Q4 is almost always higher than Q1 so the version you usually see for GDP is seasonally adjusted (Red is adjusted, blue is the 'raw' GDP figure). https://fred.stlouisfed.org/graph/?g=1b3ZV https://fred.stlouisfed.org/graph/?g=1b3ZV
    - HDThoreaun 3y ago
      Q4 always has the highest GDP. presumably because of holiday spending.
- thehappypm 3y ago
  Debt (measured in dollars) and GDP (measured in dollars per year) is a strange comparison.
probablynish 3y ago
I wonder if 'net saving' here includes businesses/government or just households. Noah Smith wrote a nice piece here https://www.noahpinion.blog/p/great-news-about-american-wealth https://www.noahpinion.blog/p/great-news-about-american-weal... breaking down Federal Reserve data that shows how net wealth of American households increased a lot from 2019 to 2022 - after adjusting for inflation, and even more so for poorer households. https://fred.stlouisfed.org/series/PSAVERT https://fred.stlouisfed.org/series/PSAVERT - this data series is labelled "Personal Savings Rate" and shows a big spike over the pandemic years, which would square with the increase in household net wealth. Maybe 'personal savings rate' refers to households, and so the story here is a transfer of wealth from the government to households over the pandemic years? Of course (now I'm really extrapolating) the govt is just funded by taxes, so maybe that further reduces to a transfer of wealth from future households/businesses to current households.
- mikeyouse 3y ago
  You're correct - it includes all saving -- households, businesses and government - net private saving which is households + businesses has been strong: https://fred.stlouisfed.org/series/W202RC1Q027SBEA https://fred.stlouisfed.org/series/W202RC1Q027SBEA But Government saving is obviously in a pretty big deficit: https://fred.stlouisfed.org/series/TGDEF https://fred.stlouisfed.org/series/TGDEF
  - probablynish 3y ago
    Thanks, that makes sense. I wonder to what extent the two rates are directly linked - household savings coming from direct govt transfers like covid stimulus checks and student debt forgiveness.
phendrenad2 3y ago
This seems to be a good way to visualize inflation, but that's all.
nonethewiser 3y ago
Is gross national income simply all household income?
- onlyrealcuzzo 3y ago
  https://en.m.wikipedia.org/wiki/Gross_national_income https://en.m.wikipedia.org/wiki/Gross_national_income IIUC, GDP counts income owned by foreigners that happened in the US. GNP counts income only owned by residents of the US that happened in the US. If someone from China owns a toaster making factory in the US, which employs no one, and it generates $100M of toasters a year - that's in GDP but not GNP.
  - sokoloff 3y ago
    That toaster factory is in US GDP and in China’s GNP. (I think.)
  - kasdi 3y ago
    > GNP counts income only owned by residents of the US that happened in the US. Also income of US residents that happened outside the US, no? IIUC, "domestic" is location-based while "national" is residency-based.
- kasdi 3y ago
  IIUC, it is income of any "person" of the nation, including personal, business and government.
Xeoncross 3y ago
Everyone was able to save until the massive money printing event the last few years. Same amount of stuff, but a lot more money created ($18T -> $23T) means everything now costs more. So much more that many things (cars, houses, etc..) in some areas doubled in price and people have spent all their savings to live the same life they had in 2019. https://fred.stlouisfed.org/series/QBPBSTAS https://fred.stlouisfed.org/series/QBPBSTAS
- probablynish 3y ago
  Median household net worth increased by 35% from 2019 to 2022, adjusted for inflation. For the bottom quartile of households, the median household net worth increased by a whopping 900%. Pessimism seems to be in vogue right now (or maybe always?) but in this case the data doesn't seem to bear it out.
  - Xeoncross 3y ago
    Be careful with government adjusted numbers that state everything is fine. Everyone is running out of money but don't worry, your net worth increased because your house went up with everything else. Take a look at median income / median home prices to see we're dropping fast. https://www.tradingview.com/chart/ASPUS/GJp6Gfq6-Home-Prices-Peaking-Relative-To-Household-Income/ https://www.tradingview.com/chart/ASPUS/GJp6Gfq6-Home-Prices...
  - RyanAdamas 3y ago
    Define net worth; the vast majority of people live paycheck to paycheck, can't cover a $1000 emergency, and don't actually own the assets they utilize.
    - probablynish 3y ago
      Net wealth is basically the value of all the assets you own, minus all the debt you have. The data ( https://www.federalreserve.gov/publications/files/scf23.pdf https://www.federalreserve.gov/publications/files/scf23.pdf ) just doesn't support what you said. Even within the bottom 25% of households ('bottom' with reference to their net wealth), the median net wealth increased from $400 to $3500, and this is adjusted for inflation (all in terms of 2022 dollars). Source is p18 of that PDF I linked above
kristopolous 3y ago
It'd be interesting to see this compared against the rise of computerized banking and access to credit. Ubiquitous credit card payment didn't really come in until the 1990s
RC_ITR 3y ago
Just to set context here. Net saving is: > equal to the sum of personal saving, undistributed corporate profits with inventory valuation and capital consumption adjustments, and net government saving. [0] To break that down further: Personal Saving is 'Post tax income less consumption'. That looks like this: https://fred.stlouisfed.org/series/PSAVE https://fred.stlouisfed.org/series/PSAVE Undistributed corporate profits with inventory valuation and capital consumption adjustments is a measure of how much profit companies made, but did not return to shareholders (with an adjustment to remove the effect of inflation). That looks like this: https://fred.stlouisfed.org/series/B057RC1Q027SBEA https://fred.stlouisfed.org/series/B057RC1Q027SBEA Net Government saving is (oversimplified, but basically) the deficit: https://fred.stlouisfed.org/series/TGDEF https://fred.stlouisfed.org/series/TGDEF GNI is sort of like GDP, but slightly different (treat it like the same for nearly all intents and purposes). What this chart is basically showing, is that Federal deficits are up, but it's not translating to a higher household savings rate (As was the case during the stimulus period) OR higher retained corporate earnings. I'd argue that the actual number is an intellectual exercise (i.e. it's relatively meaningless that it is now negative), but it is worth investigating why the Government is running such a large deficit in a hot economy that is not leading to better quality of life (Personal savings is a rough proxy for that). [0]https://www.bea.gov/help/glossary/net-saving#:~:text=A%20measure%20of%20the%20saving,adjustments%2C%20and%20net%20government%20saving https://www.bea.gov/help/glossary/net-saving#:~:text=A%20mea....
- ww520 3y ago
  So 'post tax income less consumption' is the money after the pretax retirement money put away.
ShaveTheTurtles 3y ago
You can see the effect of baby boomers
balderdash 3y ago
I think it’s really hard to interpret this chart without the wealth element - if I own a $300k home and and I make $50k a year, and I normally save 10% ($5k), and my house goes up in value 10% ($30k), one might feel better about spending (not saving) the $5k as I would still be $30k “richer” (as opposed to $35k).
nologic01 3y ago
There are so many moving parts, indices and measurements in economics, anybody sufficiently familiar with the data landscape can "prove" any (typically political) point they want by selectively focusing on some timeseries or another. This is not to say there is no objective economic reality, but meaningful comparisons over time and across different economies seem very hard. Thats why "economically you never had it so good" can coexist with outer despair. And this before we account for the non-accounting of externalities and the variable long term sustainability of different lifestyles (the wealth transfer from future generations).
creer 3y ago
No doubt these all are difficult to interpret. It's still a great thing to have numbers (even when the methodology for some numbers is very questionable). But if you are trying to drive or merely gauge your investment performance, or your voting strategy, this is hard to read. For example, it's fair that people were able to spend much less during Covid. Bad for vendors, great for people's overall savings which had been often too low for a while. And so, fair that there was a rebound in spending. Which is a problem when it leads to high interest rates and a major step in inflation (which some people deny exists altogether). Meanwhile there was giant increases in money supply. Most of which is not going to be re-absorbed anytime soon if ever. And is bound to have a commensurable effect. Etc, etc, etc. And so in the end how do I interpret my current investment performance? (And equally interesting question is how should our country spend / invest / repay / drive this or that). Just pick a question, any question. Is most of my investment performance purely driven by increased money supply? (meaning that even if I over-performed indexes, I may have grossly underperformed inflation - i.e. be much poorer). Hard to tell actually. Of course one way is simply to spend conservatively (i.e. too little) and invest "more than needed". But obviously that's grossly sub-optimal. For example if your objective is to spend more than comfortably so as to die pennyless <- it's an exageration but not a bad strategy depending on family or donation objectives. Anyway. Tough job.

100 points by jameslk 3y ago

How am I supposed to interpret this? That we're currently at the same point we were just before the 2008 GFC? Because that's how I read it, and I hope it isn't a rhyme.

nine_zeros 3y ago
The interpretation is that people are not saving enough. Which means personal debt is expected to rise, consumption is about to slow down, and corporations will likely see lower revenue growth that they have been used to in the past few years.
codeTired 3y ago
I think covid made it weird. People were hyper saving and it caused demand to build up. Then people were “fuck it” after things started to return back to normal. However, people will eventually have less money to spend.
- chii 3y ago
  > People were hyper saving i think instead of thinking of it as saving, it's more "unable to spend". Now that they are able to spend again, they do. There was never an intentional savings spree imho.
  - rsynnott 3y ago
    It's not just "unable to spend"; public anxiety tends to cause people to put off spending.
thatfrenchguy 3y ago
That Americans on average have been horrible savers for a generation or two?
- adventured 3y ago
  On average Americans have gotten dramatically richer over the past generation or two. The average American is doing far better financially than the average German or Swede. The median is the relatively ugly picture. The average American has invested a lot in housing and equities, both of which have soared over the past 20-30 years. The average wealth per adult in the US is ~$550,000. That's just behind Luxembourg for #2 in the world (led by Switzerland at $685,000). That's a shocking average figure for a nation with 250+ million adults. It's closing in on double that of Sweden, and it's 2/3 higher than the UK or France. It's well over double that of Germany. It's also far higher than very affluent Norway. The US Gini figure is also lower than Sweden now (Sweden has become one of the most unbalanced affluent societies due to their horribly failed immigration integration over the past decade or so). If you're American, you definitely want to be average (or above), not median. How about the median wealth per adult? ~$107,000 for the US. That's above Austria, Germany, Sweden, Finland, Japan, Singapore, Spain, Italy. And it's below the Netherlands, France, Canada, Norway, UK, etc. Germany's median wealth per adult is a mere $66,000. They should be asking some serious questions. Greece is at $53,000 and Portugal is at $70,000 for refence. The UK is up at $151,000, with France and Canada around the $135,000 area.
  - probablynish 3y ago
    Median net household wealth increase far more than mean net household wealth in the 2019-2022 period: https://www.federalreserve.gov/publications/files/scf23.pdf https://www.federalreserve.gov/publications/files/scf23.pdf Mean: about +22% Median: about +35% Median within the poorest 25% of households: +900% (!)
  - chiefalchemist 3y ago
    Average is deceiving. A single billionaire and 999 with zero yields an average of one million each. With so much wealth at the too, average is going to be pulled up even when there are many with relatively near zero.
    - adventured 3y ago
JumpCrisscross 3y ago
That the American consumer is stressed. See this comment from a quarter ago [1]. EDIT: Never mind. Personal savings are still stable [2]. Net savings included federal deficits. [1] https://news.ycombinator.com/item?id=37113568 https://news.ycombinator.com/item?id=37113568 [2] https://fred.stlouisfed.org/series/PSAVERT https://fred.stlouisfed.org/series/PSAVERT
zyang 3y ago
Winter is coming.
DarkmSparks 3y ago
in fundamental terms, the savings rate needs to be higher than the depreciation rate or the net value of the economy decreases (hard and fast) negative savings rates are hard and brutal depression territory.

jawns 3y ago

This chart is hard to interpret, because it's depicting the change in a ratio over time, without necessarily showing the trends of the underlying measurements. Thankfully, there's another chart that's linked from the first chart, representing personal savings rate: https://fred.stlouisfed.org/series/PSAVERT https://fred.stlouisfed.org/series/PSAVERT So I guess personal savings rate is falling over time (from ~10% between 1960 and 1990, to ~5% in 2000 and beyond), and gross national income is growing (and maybe even accelerating), which is why the ratio of one to the other has a more pronounced decrease. Yet I wonder how this data squares with this report from last month: "The US economy's safety net is bigger than anyone thought" https://www.businessinsider.com/us-household-savings-estimate-stronger-than-expected-economy-recession-outlook-2023-10 https://www.businessinsider.com/us-household-savings-estimat...

umeshunni 3y ago
1. Business Insider is a clickbait publication. You should probably find a better source for any information. 2. Savings rate is a point in time metrics -- d/dt if you wish. A safety net would be the 'area under the curve'. 3. The savings rate is dropping because of increased unemployment and increasing inflation.
- jawns 3y ago
  This Bloomberg piece says essentially the same thing as the Business Insider article: https://www.bloomberg.com/news/articles/2023-10-10/americans-cash-stockpile-is-hundreds-of-billions-bigger-than-thought https://www.bloomberg.com/news/articles/2023-10-10/americans...
- Eumenes 3y ago
  I like this headline on the economics page of BI: Taylor Swift and Beyoncé won't prop up the US economy much longer, with Americans' COVID-era savings running dry
- HDThoreaun 3y ago
  Unemployment is not increasing. By any measure it is near all time lows. https://fred.stlouisfed.org/series/U6RATE https://fred.stlouisfed.org/series/U6RATE

WarOnPrivacy 3y ago

Household debt to GDP https://www.sunshineprofits.com/media/cms_page_media/2019/12/11/us-household-debt-gdp-gold.png https://www.sunshineprofits.com/media/cms_page_media/2019/12...

mikeyouse 3y ago
We're still near the 2000 amount - about 25% below where we were during the GFC; https://fred.stlouisfed.org/series/HDTGPDUSQ163N https://fred.stlouisfed.org/series/HDTGPDUSQ163N
- lainga 3y ago
  How do I interpret that Q4 to Q1 sawtooth? End-of-year bonuses paying off debt?
  - mikeyouse 3y ago
    Nope - or maybe I guess - but as an input into GDP instead of debt. Non-seasonally adjusted GDP has that same pattern, Q4 is almost always higher than Q1 so the version you usually see for GDP is seasonally adjusted (Red is adjusted, blue is the 'raw' GDP figure). https://fred.stlouisfed.org/graph/?g=1b3ZV https://fred.stlouisfed.org/graph/?g=1b3ZV
  - HDThoreaun 3y ago
    Q4 always has the highest GDP. presumably because of holiday spending.
thehappypm 3y ago
Debt (measured in dollars) and GDP (measured in dollars per year) is a strange comparison.

probablynish 3y ago

I wonder if 'net saving' here includes businesses/government or just households. Noah Smith wrote a nice piece here https://www.noahpinion.blog/p/great-news-about-american-wealth https://www.noahpinion.blog/p/great-news-about-american-weal... breaking down Federal Reserve data that shows how net wealth of American households increased a lot from 2019 to 2022 - after adjusting for inflation, and even more so for poorer households. https://fred.stlouisfed.org/series/PSAVERT https://fred.stlouisfed.org/series/PSAVERT - this data series is labelled "Personal Savings Rate" and shows a big spike over the pandemic years, which would square with the increase in household net wealth. Maybe 'personal savings rate' refers to households, and so the story here is a transfer of wealth from the government to households over the pandemic years? Of course (now I'm really extrapolating) the govt is just funded by taxes, so maybe that further reduces to a transfer of wealth from future households/businesses to current households.

mikeyouse 3y ago
You're correct - it includes all saving -- households, businesses and government - net private saving which is households + businesses has been strong: https://fred.stlouisfed.org/series/W202RC1Q027SBEA https://fred.stlouisfed.org/series/W202RC1Q027SBEA But Government saving is obviously in a pretty big deficit: https://fred.stlouisfed.org/series/TGDEF https://fred.stlouisfed.org/series/TGDEF
- probablynish 3y ago
  Thanks, that makes sense. I wonder to what extent the two rates are directly linked - household savings coming from direct govt transfers like covid stimulus checks and student debt forgiveness.

phendrenad2 3y ago

This seems to be a good way to visualize inflation, but that's all.

nonethewiser 3y ago

Is gross national income simply all household income?

onlyrealcuzzo 3y ago
https://en.m.wikipedia.org/wiki/Gross_national_income https://en.m.wikipedia.org/wiki/Gross_national_income IIUC, GDP counts income owned by foreigners that happened in the US. GNP counts income only owned by residents of the US that happened in the US. If someone from China owns a toaster making factory in the US, which employs no one, and it generates $100M of toasters a year - that's in GDP but not GNP.
- sokoloff 3y ago
  That toaster factory is in US GDP and in China’s GNP. (I think.)
- kasdi 3y ago
  > GNP counts income only owned by residents of the US that happened in the US. Also income of US residents that happened outside the US, no? IIUC, "domestic" is location-based while "national" is residency-based.
kasdi 3y ago
IIUC, it is income of any "person" of the nation, including personal, business and government.

Xeoncross 3y ago

Everyone was able to save until the massive money printing event the last few years. Same amount of stuff, but a lot more money created ($18T -> $23T) means everything now costs more. So much more that many things (cars, houses, etc..) in some areas doubled in price and people have spent all their savings to live the same life they had in 2019. https://fred.stlouisfed.org/series/QBPBSTAS https://fred.stlouisfed.org/series/QBPBSTAS

probablynish 3y ago
Median household net worth increased by 35% from 2019 to 2022, adjusted for inflation. For the bottom quartile of households, the median household net worth increased by a whopping 900%. Pessimism seems to be in vogue right now (or maybe always?) but in this case the data doesn't seem to bear it out.
- Xeoncross 3y ago
  Be careful with government adjusted numbers that state everything is fine. Everyone is running out of money but don't worry, your net worth increased because your house went up with everything else. Take a look at median income / median home prices to see we're dropping fast. https://www.tradingview.com/chart/ASPUS/GJp6Gfq6-Home-Prices-Peaking-Relative-To-Household-Income/ https://www.tradingview.com/chart/ASPUS/GJp6Gfq6-Home-Prices...
- RyanAdamas 3y ago
  Define net worth; the vast majority of people live paycheck to paycheck, can't cover a $1000 emergency, and don't actually own the assets they utilize.
  - probablynish 3y ago
    Net wealth is basically the value of all the assets you own, minus all the debt you have. The data ( https://www.federalreserve.gov/publications/files/scf23.pdf https://www.federalreserve.gov/publications/files/scf23.pdf ) just doesn't support what you said. Even within the bottom 25% of households ('bottom' with reference to their net wealth), the median net wealth increased from $400 to $3500, and this is adjusted for inflation (all in terms of 2022 dollars). Source is p18 of that PDF I linked above

kristopolous 3y ago

It'd be interesting to see this compared against the rise of computerized banking and access to credit. Ubiquitous credit card payment didn't really come in until the 1990s

RC_ITR 3y ago

Just to set context here. Net saving is: > equal to the sum of personal saving, undistributed corporate profits with inventory valuation and capital consumption adjustments, and net government saving. [0] To break that down further: Personal Saving is 'Post tax income less consumption'. That looks like this: https://fred.stlouisfed.org/series/PSAVE https://fred.stlouisfed.org/series/PSAVE Undistributed corporate profits with inventory valuation and capital consumption adjustments is a measure of how much profit companies made, but did not return to shareholders (with an adjustment to remove the effect of inflation). That looks like this: https://fred.stlouisfed.org/series/B057RC1Q027SBEA https://fred.stlouisfed.org/series/B057RC1Q027SBEA Net Government saving is (oversimplified, but basically) the deficit: https://fred.stlouisfed.org/series/TGDEF https://fred.stlouisfed.org/series/TGDEF GNI is sort of like GDP, but slightly different (treat it like the same for nearly all intents and purposes). What this chart is basically showing, is that Federal deficits are up, but it's not translating to a higher household savings rate (As was the case during the stimulus period) OR higher retained corporate earnings. I'd argue that the actual number is an intellectual exercise (i.e. it's relatively meaningless that it is now negative), but it is worth investigating why the Government is running such a large deficit in a hot economy that is not leading to better quality of life (Personal savings is a rough proxy for that). [0]https://www.bea.gov/help/glossary/net-saving#:~:text=A%20measure%20of%20the%20saving,adjustments%2C%20and%20net%20government%20saving https://www.bea.gov/help/glossary/net-saving#:~:text=A%20mea....

ww520 3y ago
So 'post tax income less consumption' is the money after the pretax retirement money put away.

ShaveTheTurtles 3y ago

You can see the effect of baby boomers

balderdash 3y ago

I think it’s really hard to interpret this chart without the wealth element - if I own a $300k home and and I make $50k a year, and I normally save 10% ($5k), and my house goes up in value 10% ($30k), one might feel better about spending (not saving) the $5k as I would still be $30k “richer” (as opposed to $35k).

nologic01 3y ago

There are so many moving parts, indices and measurements in economics, anybody sufficiently familiar with the data landscape can "prove" any (typically political) point they want by selectively focusing on some timeseries or another. This is not to say there is no objective economic reality, but meaningful comparisons over time and across different economies seem very hard. Thats why "economically you never had it so good" can coexist with outer despair. And this before we account for the non-accounting of externalities and the variable long term sustainability of different lifestyles (the wealth transfer from future generations).

creer 3y ago

No doubt these all are difficult to interpret. It's still a great thing to have numbers (even when the methodology for some numbers is very questionable). But if you are trying to drive or merely gauge your investment performance, or your voting strategy, this is hard to read. For example, it's fair that people were able to spend much less during Covid. Bad for vendors, great for people's overall savings which had been often too low for a while. And so, fair that there was a rebound in spending. Which is a problem when it leads to high interest rates and a major step in inflation (which some people deny exists altogether). Meanwhile there was giant increases in money supply. Most of which is not going to be re-absorbed anytime soon if ever. And is bound to have a commensurable effect. Etc, etc, etc. And so in the end how do I interpret my current investment performance? (And equally interesting question is how should our country spend / invest / repay / drive this or that). Just pick a question, any question. Is most of my investment performance purely driven by increased money supply? (meaning that even if I over-performed indexes, I may have grossly underperformed inflation - i.e. be much poorer). Hard to tell actually. Of course one way is simply to spend conservatively (i.e. too little) and invest "more than needed". But obviously that's grossly sub-optimal. For example if your objective is to spend more than comfortably so as to die pennyless <- it's an exageration but not a bad strategy depending on family or donation objectives. Anyway. Tough job.