Frequently Asked Questions

Guidelines for Citing BEA Information | ID: 512 | Created: Mar-13-2009
Answer

Have there been large revisions to the personal saving rate?

As with most of its estimates, BEA revises the estimates of the personal saving rate -- personal saving as a percentage of disposable personal income -- over time. These revisions have resulted from the incorporation of new or revised source data that were not available at the time of the earlier estimates and the incorporation of improved concepts and estimation methods. Nevertheless, the revised estimates have consistently retained the long-term downward trend in the personal saving rate from the early 1980s to the early 2000s that was present in the previously published estimates (see chart).

BEA estimates personal saving as the difference between current-dollar disposable personal income and personal outlays. Revisions to the estimates of disposable personal income or of personal outlays result in revisions to the estimates of personal saving and the personal saving rate. For each quarter, BEA's revision cycle begins with three "current" consecutive quarterly estimates based on progressively more complete source data. In addition, when the second quarterly estimate -- the "preliminary" estimate -- is released for the subsequent quarter, BEA revises its estimates of private wages and salaries to incorporate newly available tabulations from the Bureau of Labor Statistics quarterly census of employment and wages.

The quarterly estimates are subject to annual revisions that encompass the 3 most recent years and that reflect newly available source data, such as annual economic surveys and tabulations of income tax data for corporations, partnerships, and sole proprietorships. About every 5 years, "comprehensive" or "benchmark" revisions implement major methodological and conceptual improvements to BEA's measures. The comprehensive revisions also incorporate the benchmark input-output accounts, which provide levels of the components of GDP for the benchmark year.

As the chart shows, successive annual and comprehensive revisions have generally (but not always) led to higher estimates of the level of the personal saving rate in the 1970s, 1980s, and 1990s, but the trend has consistently been down. Some of these revisions resulted from the routine incorporation of new or revised source data. Some of the revisions were due to methodological changes that were designed to improve the estimates, including the incorporation of revised estimates of income misreporting, which raised personal income and personal saving in the 1985 and 1991 comprehensive revisions. Some of the revisions were due to conceptual changes in BEA's measures: the upward revision to the personal saving rate in the 1999 comprehensive revision, for example, mainly reflected the a revised treatment of government employee retirement plans that made their treatment similar to private pension plans and raised personal income and personal saving. On the other hand, the 2003 comprehensive revision reduced personal saving in the 1990s, mainly because the incorporation of improved estimation methods and source data for measuring consumer spending on services resulted in upward revisions to personal outlays.

The best way to examine trends in the personal saving rate is to use consistent measures of disposable personal income and personal saving from the best available estimates produced by each revision. The initial current estimates of the saving rate are not comparable over time because they reflect inconsistent definitions and methods. As the chart shows (in which each line utilizes a consistent measure), the downtrend in the personal saving rate since the early 1990s is similar to the downward trend in the previously published estimates.

Personal saving rate

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