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But a more troubling aspect of today’s revision is what the drop in income and burst in spending means for the average household’s bank account: following the latest annual revision,\u00a0what until last month was a 5.5% personal saving rate was revised sharply lower as a result of the ongoing downward historical adjustment to personal income and upward adjustment to spending, to only 3.8%.<\/strong><\/p>\n In dollar terms, this revision means that\u00a0a quarter trillion dollars, or $226.3 billion, in savings was just “wiped away” from US households – if only in some computer deep in the bowels of the BEA buildings –\u00a0 who as a result have that much less purchasing power,<\/strong>\u00a0and following the revision the total personal saving in the US as calculated by the BEA is now down to only $546 billion, down from $791 billion before the revision.<\/p>\n This means that either households will have to incur this much incremental debt to continue on the previous spending “trendline”, or a quarter trillion in potential growth from the future economy (recall 70% of US GDP is the result of consumer spending), has just been chopped off.<\/p>\n<\/a><\/p>\n<\/a><\/p>\n