WASHINGTON – Americans socked away more savings in May than at any time since September as they continued to be cautious spenders, according to government data released Monday.

According to the Commerce Department, the personal savings rate in May — the part of every paycheck that goes unspent — rose to 4 percent, the highest amount in nearly a year, as worried consumers saw stocks tumble in the United States and debt problems spread across Europe.

Though virtuous, an increase in personal savings creates a paradox for the gross domestic product, 70 percent of which is based on consumer spending.

The personal savings rate dove to barely more than 1 percent in 2005 when the housing boom was at its height, as consumers borrowed from their homes to buy goods. This pushed the economy higher, but left consumers cash-poor when the housing bust hit and drove nearly 10 percent of Americans out of work.

Now consumers are saving again. And, as this is so far a jobless recovery — the June unemployment figure, due out Friday, is forecast to remain unchanged at a very high 9.7 percent — hopes for a recovery rest in consumer spending.

Miller Tabak equity strategist Peter Boockvar wrote that forecasters and government policymakers should see the trend toward consumer savings as a long-term one.

 


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