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Americans Cut Savings to a 12-Year Low

The drop matters since consumers make up roughly 70 percent of the U.S. economy

While American consumption continues to power the economy, there’s a cautionary signal: The savings rate is falling. In December, the rate fell to 2.4 percent, the lowest since September 2005, from 2.5 percent the prior month, according to Commerce Department figures released Monday. The drop matters because consumers make up roughly 70 percent of the economy and they can only push savings down so far before it impacts their ability to keep spending, which in turn fuels U.S. growth.

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