To what level can the savings rate of the Americans go?

- "If Americans’ (net) savings rate remains close to 6% - as it has for several months - the United States will not slide back into recession, but post slower growth for a long time to come."
- "But if we believe that there will be a new recession - i.e. a double dip - in the United States, we also have to believe that the savings rate among Americans will rise again and their consumption drop, which is possible given the changes in Americans’ wealth and the labour market situation, and despite
the low interest rates and the erratic stock market return."
- "In view of the trends in asset prices (real estate, equities), unemployment, problems encountered in the labour market, interest rates, etc., we seek to ascertain at what level Americans’ savings rate should normally be today, and whether there is a risk that it will continue to rise sharply. Our econometric analysis, which seems to be of good quality, shows that Americans’ current savings rate (6% for net savings) seems to correspond to the savings rate that is consistent with the trend in all determinants of household savings. So we do not believe in a further sharp rise in the savings rate or, accordingly, in a double dip scenario."

Natixis Flash Economics 450 20100910

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