There’s been a fundamental change in people’s behavior in the USA that will affect the economy for years to come. US Government data delivered last Friday showed that the household savings rate rose to 6.9% in May, the highest since December 1993, as personal spending increased less than incomes. The rate in April 2008 was zero. Most of the rise in income in May was due to one-time government stimulus payments to seniors, said Nigel Gault chief US economist at IHS Global Insight in Lexington, Massachusetts. Americans’ newfound frugality is pinching airlines such as Chicago-based UAL Corp., which is cutting staff amid dwindling demand for leisure travel. Donations to charities dropped last year for the first time since 1987, and they’re in danger of declining further in 2009. US banks are benefiting. Deposits grew 1.7 % in May, the ninth-biggest monthly rise since 1973.
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