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U.S. savings rate hits lowest level since 2008 — here's why economists aren't concerned


In April, the U.S. personal savings rate fell to 4.4%, the lowest since September 2008, according to data from the Commerce Department published Friday. "In fact, it is actually our baseline forecast for the saving rate to fall below its prior-cycle average of 7.2% through the end of 2023." In April 2020, the savings rate hit a record 33.8% as government checks hit consumer bank accounts and the spread of Covid-19 kept many people at home and businesses closed.&nbsp

Earlier this month, earnings reports from Walmart (US.WMT) and Target (US.TGT) spooked investors, with slowing sales and ballooning inventories at these retail giants perhaps suggestive of a consumer environment that was eroding rapidly. Subsequent reports from other retailers and strong signals from the travel sector, however, have allayed some of these fears about an imminent pullback in consumer spending.&nbsp

As JetBlue (US.JBLU) told investors earlier this week, the "demand environment continues to be strong" with sales in June set to be "meaningfully better" than what was seen in April and May. At the same time, as discount retailers like Dollar General (US.DG) and Dollar Tree (US.DLTR) suggested earlier this week, consumers have become more "intentional" in where and how they spend money — particularly when it comes to essentials like food and grocery items.


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Stock Market Rises as S&P 500, Nasdaq Add More Than 6% Last Week (DE.SXR8)


The S&amp P 500 raced higher Friday, notching its best week of the year and snapping a punishing losing streak that had almost ended its bull market. On Friday, new data showed that U.S. households boosted spending for a fourth straight month, though they reached deeply into savings to do so. Meanwhile, a closely watched U.S. inflation reading eased in April. The data, alongside some strong earnings, has pushed shares of retailers sharply higher. Dollar Tree (US.DLTR), Ulta Beauty (US.ULTA) and Ross Stores (US.ROST) were among the week’s biggest winners in the S&amp P 500, gaining at least 20% apiece.&nbsp

The S&amp P 500 gained 100.40 points, or 2.5%, to close Friday at 4158.24. The Dow Jones Industrial Average (DE.SXRU) added 575.77 points, or 1.8%, to 33212.96. The tech-heavy Nasdaq (DE.SXRV) added 390.48 points, or 3.3%, to 12131.13.Still, few investors and strategists are willing to call a bottom to a selloff that has sent the S&amp P 500 falling around 13% for the year. Some traders said the recent gains seemed like a short-term rally during a broader decline.


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