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July 28, 2010

We're not last in saving

One thing American households haven't done well in recent decades is save money. For a while the personal saving rate in the United States was zero. But many things have changed since the recession. Where do we rank now on putting money aside for the future?

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"Well ... we are doing better. In fact, the savings rate over the last couple of years has edged up to between 3.5 and 5 percent. Also if you look internationally we are certainly not at the top, but we are no longer at the bottom.

"If you look at who is at the top, China still leads the pack: 38 percent of income earned in China by their households is saved -- 38 percent. India also has a very high saving rate at 35 percent.

"But we are not last. Again we are between 3.5 and 5 percent. Japan -- for a long time, Japan was a very high saving rate country. Now they are a low rate. They are around 3 percent right now.

"And at the bottom currently is Australia. Australian households currently save at the rate of only 2.5 percent."

Posted by deeshore at July 28, 2010 08:37 AM