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Millennials get blamed for everything. The latest situation to be thrown on millennials is the slowing economy. According to a report from CNBC, millennials are saving more money than previous generations which is being blamed for an economic imbalance that is holding back the economy.
The report states: “according to data from the St. Louis Federal Reserve, the current U.S. personal savings rate, defined as income minus spending, is 8.1 percent as of August. By comparison, in 1996 the rate was 5.7 percent.”
Because people are saving more often, there is a slowdown in spending which leads to the slowing of the economy. But shouldn’t we all be happy that there are more people saving money?
“The higher savings rate, we believe, has had disinflationary impact, driving the relatively slow growth and low inflation in this recovery … causing the incentives for excess supply, and disinflation/deflation biases in the global economy,” Raymond James analyst Tavis McCourt said. “This leads to frustratingly low growth, deflationary biases in prices, excess supply, and increasing debt from the supply side attempts to improve the situation because the savings rate is going higher.
“So, what we have is a global increase in personal savings rate, which has caused excessive supply increases globally [disproportionally in China], and U.S. consumers wanting to save more [to be less insane than the last decade], which makes trade deficits less severe than they would be otherwise, growth to be slower than expected for both economies, and inflation to be lower than what it would be otherwise.”
In the end, the experts are trying to tell us that we are hurting the economy by being fiscally responsible. I don’t know about all of you, but I’d rather have a few extra zeros in my bank account than worry about what kale salad companies deserve to be supported.
