American Express and Fannie Mae aren't sure how much we're saving, but they know we're putting a lot more on credit cards for major purchases this year.
Experts spend more time worrying about our saving and spending than we do, but they don’t seem to agree about how much that is, or why we do one or the other.
American Express and Fannie Mae both released economic outlooks yesterday, and while you’d expect a credit card company and a mortgage lender to focus on slightly different things — which they do — they don’t see eye to eye on some areas where they overlap, like savings rates.
Here’s Fannie Mae…
The saving rate climbed to 5.7 percent despite slowing income growth in July. This was the highest rate since December 2012, when income was pulled into 2012 to avoid the federal tax hike enacted at the outset of 2013. Consumers appear to have slowed spending this year in favor of building savings, as the saving rate has increased 1.6 percentage points from its recent low of 4.1 percent at the end of 2013.
Meanwhile, American Express says we’re saving less, even though we want to save more…
Consumers have saved an average of $7,153 (vs. $9,944 this time last year). In January 2014, consumers reported an annual savings goal of $12,464, on average (up from $10,893 in 2013).
Of course, there’s a lot of unique territory in both, too. American Express looked at areas where Americans are spending more money this year than last and found the biggest jumps were on computers and dining out.
It also reported that 42 percent of Americans have made a big purchase this year — stuff like TVs, furniture, appliances, cars, and vacations — and more plan to do so this year than last. Nearly three quarters said they’re spending the same or more on discretionary purchases this year than they planned to.
Fannie Mae, meanwhile, says “Consumer spending fell unexpectedly in July,” but we bought a lot of cars in August — it was the fastest monthly sales pace in more than eight years. The company also expects falling gas prices to give us more money to waste elsewhere this quarter.
We’re also still reluctant to buy homes, and Fannie expects only “modest” growth through 2015. But we are going crazy with credit cards, which should make American Express happy. In July, credit card balances ballooned at the fastest rate in three years. They’ve been growing for five months running, “marking the longest streak since prior to the recession and posting the biggest year-over-year gain since October 2008.”