At the same time, the monthly personal savings rate scratched an all-time low, a negative 0.2% in July.
The following graph depicts the personal savings rate in the United States as reported by the Department of Commerce.
The budget deficit declines to 4.5 percent of GDP, sort of the mirror image of the personal savings rate, around 4 percent.
Most of the windfall income was not spent, with the US personal savings rate increasing from 4.1% of income in November to 6.5% in December.
Add to this a personal savings rate in the United States that stands below zero and, unfortunately, none of the retirement cylinders look to be firing right now.
In the second quarter of this year America's personal savings rate fell to a historic low of 0.6%, with consumer spending jumping at an annual rate of 6%.
Despite the misleading personal savings rate (negative because it arbitrarily excludes gains from income), the U.S. has more household financial savings than the rest of the world combined, an even bigger lead if tangible assets like houses and cars are counted.
Buoyed by gains on the stockmarket, they had been emptying their wallets far faster than their incomes were rising, with the result that America's personal savings rate fell in the second quarter of 1998 to its lowest level since 1945 (see chart above).
And this means that personal accounts are likely to increase the savings rate.
Although personal savings fell during the slowdown of the mid-1970s, the rate eventually spiked to an all-time high of almost 15% after the economy exited the recession.
Similarly, in Galveston, Texas, where local government workers in three counties opted for a personal savings and investment alternative to Social Security in 1981 as well, the annual rate of return fell by about half at the lowest point of the financial crisis.
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In the upswing, consumers took on mucho debt, the savings rate at one point dwelled in negative ground, normally 6 percent of personal income.
With lower oil quotes, our inflation rate is containable, consumer sentiment stays strong, savings rates run low and personal consumption expenditures grow between 2 and 3 percent as does GDP.
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With the unemployment rate still high, many professionals have been looking for work for over 12 months as their personal savings have dwindled.
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