by Calculated Risk on 12/24/2010 11:38:00 AM

According to the BEA, the personal saving rate declined in November to 5.3%:

Personal saving -- DPI less personal outlays -- was $614.8 billion in November, compared with $622.8 billion in October. Personal saving as a percentage of disposable personal income was 5.3 percent in November, compared with 5.4 percent in October.

Click on graph for larger image in graph gallery.

This graph shows the saving rate starting in 1959 (using a three month trailing average for smoothing) through the November Personal Income report.

When the recession began, I expected the saving rate to rise to 8% or more. With a rising saving rate, consumption growth would be below income growth. But that 8% rate was just a guess.

It is possible the saving rate has peaked, or it might rise a little further, but either way most of the adjustment has already happened and consumption will probably mostly keep pace with income growth next year.