The World Bank projected a further weakening of consumption growth in the United States, amid a decline in personal savings.

While personal saving in that nation was $851.2 billion in the third quarter of 2023, the personal saving rate (personal saving as a percentage of disposable personal income) was 4.2 percent. 

Other factors in the context are still-high borrowing rates and less stress in the labor market. 

Personal savings

Going forward, the World Bank predicts U.S. growth to reach 1.6 percent in 2024, considering that high real interest rates will restrain activity. 

It also expects fiscal policy to become more restrictive, even as high interest rates and weakening growth weigh on the federal budget balance. 

Personal saving refers to the amount of income individuals set aside after paying taxes and expenses.

This indicator was $948.2 billion in the first quarter of 2023 and $1.027.6 billion.

Previously, personal saving in the U.S. for all of 2020 totaled $2 trillion 678.6 billion, then declined to $2 trillion 120.5 billion in 2021 and finally dropped to $622.8 billion in 2022.

GDP 

In the United States, economic growth was resilient in 2023, rebounding to an estimated 2.5%, despite rising borrowing rates and tightening credit conditions. 

Consumer spending remained solid, supported by pent-up savings, tight labor markets, and a boost to disposable income from one-time tax adjustments. 

Activity was also supported by an expansionary impulse from fiscal policy.

From the World Bank’s perspective, U.S. business fixed investment will slow further as companies remain cautious, given economic and political uncertainties, and increasingly refinance corporate debt at higher interest rates. 

The bank projects economic growth to rise to 1.7% in 2025, closer to its trend rate, as the impact of monetary policy easing is passed through to the economy.