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Why Americans have more to spend

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July 22, 2014 analysis, consumer confidence, consumer savings rates, consumer spending, consumer spending recovery, macro, macro economics, macro economy, macro economy us, macro econonomics, macro event, macro events, macro policy, macro strategy, macro us, macro-economics, morningstar, saxo tv, strategy, tradingfloor.com, us, us economy, usd, usdjpy, yus
Earnings season gives us a snapshot of the US economy. But what about other indicators of recovery? Have a look at consumer savings rates, which are improving, suggesting that Americans have more to spend.
Bob Johnson, Director of Economic Analysis at Morningstar, looks at consumer savings rates as an indicator for future consumption in America.
The chart shows three periods when US consumer saving rates have either bottomed or topped and a temporary move in consumption has followed four or five months later. Right now consumer savings rates are closer to lower levels. However, the savings rate has gone up appreciably in the last few months. The last single point of data is up at almost five percent.
Bob Johnson believes that while consumption has remained flat we should see some acceleration in that consumption rate, based on the improved savings rates.