Pacific Investment Management Co. strategic adviser Richard Clarida said the U.S. savings rate may exceed 8%, hurting consumer spending and weighing on the economic recovery.
"I'm in the 'glass is half empty' camp," Clarida said in an interview. "Traditionally the consumer comes to the rescue of economic recoveries. We'll see a more subdued consumer."
Americans took on less debt in an effort to repair tattered balance sheets, pushing the savings rate up to 6% of disposable income in May, its highest level since 1998. It last exceeded 8% in December 1992.
Consumer spending accounts for more than 70% of U.S. economic activity.
About 8% of U.S. adults plan to increase household spending, almost one-third will spend less, and 58% expect to "stay the course," a Bloomberg survey said on Sept. 17. More than 75% of adults said they had cut spending in the past year, it said.