Revision of Commerce Department metrics alters personal savings rate - Washington Post

Revision of Commerce Department metrics alters personal savings rate - Washington Post


Americans aren’t suddenly saving a lot more of their incomes. But it looks that way, thanks to a change in how the federal government accounts for pension plans — a change that, if you’re not careful, could lead you to think the nation is better set for retirement than it actually is.
Until Wednesday morning, the Commerce Department pegged America’s personal savings rate at 4.1 percent for 2012. A revision made every five years to how the department measures the components of the economy pushed that savings rate up; now it’s 5.6 percent for 2012. The same change makes savings look much stronger before the Great Recession, too: The rate for 2002 was revised up from 3.5 percent to 5 percent. For 2005, it rose from 1.5 percent to 2.6 percent.
That money isn’t necessarily real. The Bureau of Economic Analysis didn’t find hundreds of billions of dollars stuffed in Americans’ mattresses. It decided to start counting all pension promises as savings in the bank.


The Bureau of Economic Analysis didn’t find hundreds of billions of dollars stuffed in Americans’ mattresses. It decided to start counting all pension promises as savings in the bank.