In the last post, I mentioned the fact that the US personal savings rate was relatively high. And the context for this was how the Fed might believe savings act as a cushion for consumers. At the margin, this cushion would give the Fed less pause in raising interest rates. But let's look at why the figures are so high.
Benchmark revisions and residual Q1 seasonality
This report was the first under a major revision to reporting of US economic data. The Commerce Department make these adjustments called 'benchmark revisions' from time to time in order to address systemic problems with economic data.
For example, one problem that the Commerce Department says it has addressed is the residual seasonality of Q1 GDP reporting. The numbers in Q1 have been consistently weaker than the rest of the y...
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Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.