People are cutting back on their spending and putting money aside for a rainy day. On Wednesday, the Fed increased its benchmark rate again Wednesday. The 25-basis point increase is the central bank’s 10th straight rate hike since March 2022. The increase brings the rate to a range of 5%-5.25%.
The Dow Jones Industrial Average
Nasdaq Composite Index
and S&P 500
were all trading slightly lower on Thursday morning after the Fed’s decision. The personal savings rate — personal savings as a percentage of disposable personal income — rose to 5.1% in March, up from 4.8% in February, according to the most recent data from the U.S. Department of Commerce And the personal savings rate hit $1 trillion in March, up from $915.8 billion in February. This is a turnaround from late last year, when the personal savings rate fell to its lowest level since the Great Recession and the eighth-lowest quarterly rate on record (since 1947). The personal savings rate hit 3.3% in the third quarter. “The data indicates that the economy is still moving along, trying to find its new normal as the post-pandemic period continues to roll out,” Janet Lee Krochman, a certified public accountant in Costa Mesa, Calif., told MarketWatch. While consumer spending seems to be holding steady, higher incomes may have enabled more people to save. “Businesses and their customers carry on with adjusting [and] pivoting to market forces, with some areas doing better than others,” she added.
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