Despite decreases in personal income, Americans appear to be saving more.

Personal income in December 2008 fell 0.2 percent from November. In November, personal income declined 0.4 percent from October, so it’s a little better than it was.

Real personal consumption expenditures fell 0.5 percent, while nominal dropped 1.0 percent. Real disposable personal income increased 0.3 percent, while nominal fell 0.2 percent.

The personal savings rate as a percentage of was 3.6 percent. Personal income in 2008 overall rose 3.7 percent from 2007. Real rose 1.3 percent, real rose 0.3 percent, and the personal savings rate was 1.7 percent.

is calculated by subtracting personal income minus personal current taxes.
Real and disposable income are adjusted to remove price changes.

The Bureau of Economic Analysis at the Department of Commerce provided these data.

The irony, as some commentators have said, is that as the economy needs Americans to spend money the most they suddenly become savers.

Still, it’s better to start saving, even if the economy declines for a while. You have to take care of yourself.

February 2, 2009