NEW YORK–Are Americans really as bad at saving as many reports have long suggested?
Maybe not, according to one new analysis–although there is a caveat.
U.S. households have been socking away a lot more money in recent years than had been earlier thought, revised government statistics indicate. The saving rate over 2016 and 2017 is now pegged at an average 6.7%, up from a previously reported 4.2%, noted Bloomberg in its report.
“But there’s a catch: Most of the revision to savings in recent years came about because small-business owners and other proprietors made more money to salt away, not because workers got bigger wage increases,” observed Bloomberg in its analysis.
The numbers, released by the Commerce Department’s Bureau of Economic Analysis, found the household saving rate was revised higher in 10 of the last 11 years in the latest update, sometimes substantially. The changes were mainly driven by new IRS data showing that proprietors’ income was much bigger than previously known, said Bloomberg.
“BEA officials believe they’ve now scrubbed the data clean of the so-called residual seasonality issues that have been artificially depressing first-quarter growth,” Bloomberg said. “First-quarter GDP is now calculated to have risen by an average annual rate of 1.6% from 2002 to 2017, versus 1.2% previously. For 2017, the contours of growth showed a slower second half than previously reported.