Accounting Switch Turns Around Savings Rate

February 24, 2003 ( - A revamped accounting procedure to measure Americans' monthly personal savings rate (PSR) that includes government workers' retirement accounts has made a dramatic difference in the bottom line.

Under the previous accounting, government employees’ retirement savings was considered government savings because it was under government control, according to the Bureau of Economic Analysis (BEA), which generates the PSR data, a story from reported.

Now, with both private and government pension savings taken into account, the personal savings rate hasn’t dipped below 3.4% since January 2002, and it’s been as high as 4.5%. Before the change, BEA reported a negative savings rate from August 2000 to April 2001.

Despite the improvement, the PSR still isn’t as high as it once was. From 1946 to 2002, the average personal savings rate was 7.8%. The highest annual percentage rate during that period was 10.9 % in 1982.