At 4%, the household savings rate has jumped sharply from its low of near zero, but it is still far below its post-war average of 7%.
In addition, April of 2010 saw a household savings rate of 3.6%, compared to 3.1% in March, and it has remained over 3% since the fourth quarter of 2008.
FORBES: One Big Difference Between Chinese and American Households: Debt
The makings of internal demand are there--as veteran investment bank economist George Magnus notes in his new book about emerging markets, Uprising, India and not China has the highest household savings rate in Asia.
The German household savings rate, at around 12%, is higher than the rest of Europe's and the government's short-term working schemes--in which wages are topped up to help companies avoid layoffs--has kept unemployment in check.
We expect 1.7% growth in real personal consumption expenditures in the four quarters ending September 2008 even under our soft-landing scenario, below the 2% four-quarter low in the 2001 recession (see graph and further discussion in the attachment.) In recent years, we predicted and explained the resilience in U.S. consumption growth in terms of job prospects and the high actual household savings rate.
But in China, where most savings are in the form of bank deposits and where earnings on savings are a significant portion of total household earnings, lowering deposit rates tends to increase the savings rate.
This sounds bad, but should be evaluated in terms of our demographics, low unemployment rate, attractiveness to foreign investment and rising household savings.
The Cabinet Office gives warning that the once-lauded savings rate, which peaked at 23% of household income in 1973, is now down to a Western-like 2.7%.
With a savings rate of barely 4% of GDP, the average US household is unlikely to be over-saving.
An IMF paper calculates that even if the savings rate remains close to where it is now, gross debt may exceed gross household assets by 2015.
应用推荐