The BEA just released its latest figures on personal income and spending in the US:
Personal income decreased $238.6 billion, or 2.3 percent, and disposable personal income (DPI) decreased $241.4 billion, or 2.6 percent, in January, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) decreased $3.9 billion, or less than 0.1 percent.
…The 2.3 percent decrease in January personal income mainly reflected the effect of the payment of a special dividend by the Microsoft Corporation, which had boosted personal income in December. Excluding this special factor and others, which are discussed more fully below, personal income increased $52.3 billion, or 0.5 percent, in January, after increasing $62.6 billion, or 0.6 percent in December.
Note that the personal savings rate continues to hover around 1% of disposable income. Thus the average worker with a salary of $75,000 per year (which would probably yield disposible income of about $50,000 per year) is currently only saving about $40 per month. By the way, that $40 saved per month includes net debt repayments, since it makes no analytical difference whether the $40 is put into a bank account or used to pay down the principal balance on a loan — both actions increase the individual’s net asset position by $40.
One need look no further to explain the bulk of the US’s current account deficit.