Money | The savings rate has been falling steadily in recent years, but until last year it had not gone negative for a full year since 1933
by Timothy Lamer
Posted 2/11/06, 12:00 am
A penny earned was more than a penny spent by Americans last year, as the U.S. personal savings rate dropped into negative territory for the first time since the Great Depression.
The Commerce Department reported last week that the 2005 savings rate was minus 0.5 percent, meaning that Americans last year spent all of their after-tax income and then dipped into savings to spend even more. December was an especially profligate month, as consumer spending increased 0.9 percent while incomes rose less than half as fast, at 0.4 percent.