Personal Savings Rate
Monitor the U.S. personal savings rate. Historically low savings mean consumers have no financial buffer when the economy turns down.
Current Value
Trigger Level: <4% = consumers have no buffer
AI Analysis
As of February 22, 2026, the personal savings rate stands at 3.6%, which is below the critical threshold of 4%. This very low level indicates that consumers have little financial cushion, raising the risk of a recession as spending may decline if economic conditions worsen.
What is the Savings Rate?
The personal savings rate measures the percentage of disposable personal income that is saved rather than spent. Released monthly by the BEA, it reflects consumers' ability to build financial reserves.
Why It Matters for Recession Risk
A low savings rate means consumers are spending nearly everything they earn, leaving no cushion for economic shocks. When savings are depleted, any disruption to income (job loss, rate hikes) quickly translates into reduced spending.
Historical Context
The savings rate fell to 2.2% before the 2008 crisis and has been trending below 5% through 2025. The post-COVID savings surplus has been fully depleted, leaving consumers more vulnerable than at any point since 2007.
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