Posted: 2/1/2007 7:28:18 AM EDT
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2006 Personal Savings Drop to 74-Yr. Low Feb 1, 8:56 AM (ET) By MARTIN CRUTSINGER High Yield Online Savings - Reach your goals. Earn 6.00% APY* on New Money with HSBC Direct HSBCdirect.com WASHINGTON (AP) - People once again spent everything they made and then some last year, pushing the personal savings rate to the lowest level since the Great Depression more than seven decades ago. The Commerce Department reported Thursday that the savings rate for all of 2006 was a negative 1 percent, meaning that not only did people spend all the money they earned but they also dipped into savings or increased borrowing to finance purchases. The 2006 figure was lower than a negative 0.4 percent in 2005 and was the poorest showing since a negative 1.5 percent savings rate in 1933 during the Great Depression. For December, consumer spending rose a solid 0.7 percent, the best showing in five months, while incomes rose by 0.5 percent, both figures matching Wall Street expectations. <snip> Whatever the reason for the low savings, economists warn that it the phenomenon exists at a particularly bad time with 78 million baby boomers approaching retirement age. Instead of building up savings to use during retirement, baby boomers are continuing to spend all their earnings. full story |