This Guy Thinks Economic Slump Taught Americans Value Of Saving

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Uh, read here:

Households in the U.S. may remain intent on repairing tattered finances by rebuilding savings for years to come as the specter of job losses and meltdown in stocks triggered by the recession lingers.

Americans are putting money away at a pace more than double that leading up to the economic slump. The saving rate has averaged 4.8 percent since June 2009, when the 18-month contraction ended, compared with 2.2 percent in the three years leading up the downturn.

“Households are going to be mired in this deleveraging environment for a few more years,” Ellen Zentner, a senior U.S. economist at Nomura Securities International Inc. in New York, said in a telephone interview. “That’s not atypical following a financial crisis.”

Almost three years into the recovery, the world’s largest economy has yet to regain even half the 8.8 million jobs lost and $16.4 trillion in household net worth washed away as a result of the worst recession since the 1930s. While the saving rate has dropped recently, longer term the need to boost cash reserves and pay down debt may eclipse the urge to be the first on the block to drive the newest model car.

Auto Demand
Pent-up demand for automobiles helped propel a 0.8 percent gain in consumer spending in February, the biggest in seven months, according to Commerce Department data. The pickup carried over into March as figures this week showed retail sales also advanced 0.8 percent, reflecting stepped-UNNp purchases of furniture, clothes and electronics.

Stronger earnings, reflecting in part the recent pickup in sales, are boosting share prices. The Standard & Poor’s 500 Index climbed 0.4 percent to 1,382.32 at 10:03 a.m. in New York. General Electric Co. (GE), Microsoft Corp. (MSFT) and Schlumberger Ltd. reported profits that topped analysts’ estimates.

Shares were also boosted by better economic news elsewhere. A report showed German business confidence unexpectedly increased in April for a sixth month,