Savings Rate
The savings rate measures the percentage of disposable income that households save rather than spend.
Meaning in Practice
The savings rate is calculated by dividing total household savings by disposable income. It reflects consumer confidence and financial resilience. The indicator is usually reported monthly or quarterly.
Why It Matters
A rising savings rate may signal caution and weaker short-term consumption. A declining rate can indicate stronger spending but potentially lower financial buffers. Policymakers assess it to understand demand trends.
Market Impact
Higher savings may weigh on retail and consumer-related equities. Lower savings rates can support short-term growth expectations. Bond markets respond to broader consumption and inflation implications.
Example
If households save 10 percent of their disposable income, the savings rate is 10 percent.