Interesting note from Bruce Kasman of JPMorgan on the supposed retrenchment of the US consumer as Americans save, save, save (bold is mine):

Personal saving rate is poised to fall In the past year, US households have raised their saving rate an astonishing 5.5%-pt to 5.7%. During the first half of this adjustment, spending contracted sharply against the backdrop of falling income. This year, saving has moved higher as automatic stabilizers and government income supports have helped boost disposable income. Despite a soaring unemployment rate and falling labor income, households have managed to maintain a relatively constant level of real consumer spending. … If the saving rate continued to rise, or even remained stable, consumer spending would sharply contract, and prospects for an end to the recession would likely be dashed. … This scenario is unlikely however, as there are a number of forces promoting stable spending and a lower saving rate in the coming months. In the past, sharp swings in nonwage income and energy prices have had limited effects on spending and this pattern is likely to be repeated in 2009. In addition, consumer expectations of economic and financial conditions have improved markedly in recent months and is likely to be a force behind firmer spending. Finally, credit sensitive demand has been depressed, and the recent modest relaxing of financing constraints will tend to support spending. While the growth rate of real consumer spending in the second half is expected to be close to the growth rate in the first half, the pattern should shift to somewhat stronger spending growth for autos and other durables (from extremely low levels), likely offset by even weaker
spending growth on services.