Savings Rate Hits Zero in June

David — Tue, 09 Aug 2005 04:06:00 +0000

The savings rate for June 2005 hit zero, for only the second time since 1959, when the Commerce Department began tracking savings by consumers. “[Rising home values] are making people feel they don’t need to save,” Lakshman Achuthan, managing director of the Economic Cycle Research Institute, told CNN Money. While high levels of consumer spending are helping drive the economy now, if real estate prices start to decline, it will be bad for the economy, as consumers run out of home equity they can tap.

Rudofsky Associates » Lakshman Achuthan

Savings Rate Hits Zero in June