U.S. consumers save more, spend less -IMF study

WASHINGTON, Feb 1 (BestGrowthStock) – U.S. consumers have tightened
their belts in the wake of the global financial crisis, which
if sustained would break a trend of steady increases in the
consumption rate since the 1980s, according to an International
Monetary Fund study published on Monday.

The rate of U.S. household consumption is likely to fall
from its current level, causing the saving rate to rise to
about 6 percent of disposable personal income from nearly 5
percent in 2009, the study found.

Compared to years of over-consumption by Americans, fueled
by a credit boom, the IMF said the savings rate implies a
decline in U.S. private-sector demand in the order of 3
percentage points of gross domestic product.

Using economic simulations, the IMF said U.S. household
consumption and saving rates are expected to settle at 89.5 to
91.5 percent and 5 to 7 percent of disposable income,
respectively, over the next several years.

Similar levels of consumption and savings rates were last
seen in the early 1990s, it said.

The IMF said the future of U.S. consumption had “tangible
macroeconomic implications” for the the U.S. economic recovery
and for global growth and current account imbalances.

“If U.S. private-sector demand remains at a
subdued level, global economic growth will be less vigorous
than otherwise, and the distribution of current account
balances will need a realignment — a smaller deficit in the
U.S. will have to be matched by smaller surpluses or larger

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(Reporting by Lesley Wroughton; Editing by Leslie Adler)

U.S. consumers save more, spend less -IMF study