Boomers Finally Take Savings Message To Heart Rate Rose To 5.7 Percent In September From 4.1 Percent In May

Americans appear to be doing what their wise elders always told them to do. They are making more money, and saving more of it.

The Commerce Department said recently personal income rose a solid 0.6 percent in September, but spending inched forward only 0.1 percent, while the personal savings rate reached the highest level in almost three years.

The savings rate - historically low in this country compared with rates in nations such as Japan and Germany - rose to 5.7 percent from 5.1 percent in August and is up from 4.1 percent in May.

While some economists said the development points to a promising Christmas retailing season stoked by greater disposable income, others cautioned that a continuing high level of consumer debt and personal bankruptcies may hold holiday cheer in check.

“This Christmas will be better than last, but I don’t think consumers are going to go out and splurge,” said Mark Zandi, chief economist at Regional Financial Associates in West Chester, Pa. “The debt burden is still very high.”

Zandi also pointed out that the increased savings rate may be an indication that Baby Boomers, chided for years by economists to be more financially responsible, finally may be getting the message.

“We’ve all been waiting for the day when aging Boomers save for retirement and the education of their children,” he said. “That’s beginning to show up in some of the data.”