Uptick in savings could be drag on recovery

Consumers in U.S. Increase Savings While Spending Less

Excerpt:

The latest economic data released Monday painted a picture of American consumers and businesses embarking on an era of thrift as the recession deepens, spending less on consumer goods, housing and big-ticket developments like office buildings and hotels.

Americans cut their spending for a sixth month in December and, perhaps more significant, put more into their savings accounts, the government reported Monday, as they worried about losing their jobs and earning less in a deteriorating economy.

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“If households are shying away from spending, what’s going to cause businesses to start spending again?” a senior economist at Moody’s Economy.com, Aaron Smith, said.

Comment: Haven't seen the numbers yet, but a low savings rate has hurt the US Economy.