US Personal Savings Rate Falls to 4.2%, Lowest Since October 2022

US personal savings dropped 0.2 percentage points to 4.2% in September, down 3.4 points since January 2024 and well below the 6.2% pre-pandemic average. Consumer spending rose 6.3% YoY while income grew just 4.1% YoY, forcing households to borrow more as inflation pressures persist. This demand-side weakness feeds into the PCE inflation outlook traders watch for Fed policy.