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The Dutch investment bank ING reckons talk of Americans rediscovering savings is misleading.
Households are slashing their purchases of financial assets. The savings ratio is rising because borrowing is falling even more rapidly. The household savings ratio climbed to 6.9 percent in May, up from a low point of 0.4 percent in 2005. But their purchases of financial assets plunged to -0.5 percent of income in the first quarter (the most recent data), down from a recent peak of 21.6 percent in 2004.
Given this, it will be more than interesting to see the second quarter figures, which should reflect most of the March to June global equity rally. But until then, what do you think? Is the "Americans are saving" mantra misleading?
Emily Kaiser adds: