Tags: pimco | savings | rate

Pimco: Savings Rate May Top 8 Percent

By Julie Crawshaw   |   Thursday, 01 Oct 2009 02:23 PM

Richard Clarida, strategic adviser at bond giant Pacific Investment Management Co., says the U.S. savings rate may exceed 8 percent, hurting consumer spending and weighing on the economic recovery.

“I’m in the glass is half-empty camp,” Clarida told Bloomberg.

“Traditionally, the consumer comes to the rescue of economic recoveries. We’ll see a more subdued consumer.”

Clarida believes economic growth will be choppy, with some quarters above 2 percent and others below.

“At some point as unemployment declines, the Fed will need to renormalize rates,” he notes.

“It’s too soon to tell the pace at which they will renormalize. I don’t think there will be a Fed hike until late 2010 or 2011.”

A recent Bloomberg poll showed that more than 75 percent of those polled had reduced spending during the past year.

Only 8 percent plan to increase household spending, nearly one-third will continue to spend less, while 58 percent expect to “stay the course.”

Concerns about job security flared up in September, causing consumer confidence levels to drop, The Associated Press reports.

Paul Dales, U.S. economist at Capital Economics Ltd, said that despite a rally in the stock market, shoppers are fixating on the job market and declining wages.

"Falling employment and incomes are undermining confidence and are likely to continue to do so," Dales wrote in a report.

"Confidence is set to remain at fairly subdued levels."

© 2017 Newsmax. All rights reserved.

1Like our page
2Share
Economy
Richard Clarida, strategic adviser at bond giant Pacific Investment Management Co., says the U.S. savings rate may exceed 8 percent, hurting consumer spending and weighing on the economic recovery.“I’m in the glass is half-empty camp,” Clarida told Bloomberg....
pimco,savings,rate
229
2009-23-01
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved