Households have increased their savings at the fastest rate since the cash hoarding during the 2008 global financial crisis, as consumers save – not spend – most of the Morrison government's tax rebates for low-to-middle income earners.
The household savings rate rose 2.1 percentage points in the September quarter to 4.8 per cent, following personal income tax refunds and the June and July interest rate cuts by the Reserve Bank of Australia.
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John Kehoe is economics editor at Parliament House, Canberra. He writes on economics, politics and business. John was Washington correspondent covering Donald Trump’s first election. He joined the Financial Review in 2008 from Treasury. Connect with John on Twitter. Email John at jkehoe@afr.com
Matthew Cranston was The Australian Financial Review’s United States correspondent.
