Chart courtesy of Seeking Alpha
During the recession, we all started minding our spend — companies, nonprofits, families and individuals included (governments, of course, got a pass). Of course, if you’re a family or individual lucky enough to be gainfully employed, and you cut back your consumption, the result almost certainly leads to increased savings (or at least debt repayment). I found the chart that consultant Edward Harrison recently shared on Seeking Alpha to be a great reminder of the power of recession to put us into savings mode. Looking at historical U.S. savings levels from 1947 onward, what’s most interesting is that until 1995 the quarterly savings rate (based on a rolling 4-quarter average) was awlays above 6%. In the ’70s and early ’80s, saving peaked at nearly 12% during the inflationary cycle, only to begin to fall off a cliff in 1982.
But after 1995 (and specifically after 2001), the U.S. savings rate plummeted to less than 2% at various points…
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