Personal Saving Rate is the ratio of personal saving to disposable personal income. Personal saving is equal to personal income minus personal outlays and personal taxes. It can be viewed as money that could be used either to provide funds to capital markets or to invest in real assets such as residences. Therefore, a low personal saving rate is a sign of a positive social mood and exuberance in the economy.
On the other hand, a high personal saving rate is a sign of a negative social mood and worry over the economy. A high personal saving rate would normally occur in deflation because people hoard cash.
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