The Commerce Department is showing an enormous spike in personal savings as we continue with the deleveraging theme. People are not paying down their debt, sitting on cash instead. The 6.9% savings rate we hit in May is actually a 50-year average for the US - if anything, we just reverted to the mean.
Savings rate as % of disposable personal income
Some are attributing this to the government stimulus spending (see CNN: Personal income boosted by stimulus). But that's unlikely, as only about $50 billion of the $787 billion stimulus bill is expected to be spent this year - most of that going to various state programs. Except maybe for the increase in unemployment benefits, it's hard to attribute this to anything but uncertainty that's on the minds of the consumer.
The dollar amount of personal savings has jumped to a record.
From WSJ:
...there is still no sign that Americans are taking that money to the shops. Personal consumption expenditures, a favored gauge of inflation among Federal Reserve policymakers, were up just 0.1% on both the month and the year. The core rate, which strips out food and energy prices, was also 0.1% higher on the month.In the long term however, this trend will help repair the severely damaged consumer balance sheet.