Article Image

IPFS News Link • Economy - Recession-Depression

The Personal Savings Rate is at Great Recession Levels


This marks the lowest rate on record since September 2008 amid the Great Recession.

People hoard and save when they are pessimistic about the future. That innate desire to save is not possible with inflation at 8.3%. For example, in April 2020, the lockdowns began to take a stronghold on the US. People were losing their jobs, basic necessities such as toilet paper were in short supply, and no one knew when life would return to normal (spoiler: it never will). Fears were high, but inflation was only 4.2%. The personal savings rate at that time reached a historical high of 33.8%, partially due to government handouts, social programs, and payment moratoriums.

People can hardly save with the current cost of living. If the economy continues to slide into a recession, survival will be the main concern rather than saving.