U.S. Has Negative Savings Rate for 2006

The U.S Department of Commerce, Bureau of Economic Analysis (BEA) announced last week that Americans had a negative savings rate for 2006. The annual savings rate was negative 1 percent, which was the lowest since 1933.

The savings rate from this BEA report is a calculation that takes total disposal income (after taxes) and deducts total spending. Note that this calculation doesn’t include all types of savings (e.g. pensions, 401(k) plans) and doesn't account for changes in household wealth (e.g. increasing value of real estate or other investments).

For more information:

• Official announcement from U.S Department of Commerce, Bureau of Economic Analysis
• AP news story, via FindLaw
• Resources for Making a Budget (FindLaw)