personal savings rate

The Personal Savings Rate (PSR) once again made headlines recently when the Department of Commerce released the May 2009 figure, which was a whopping 6.9%. For some perspective, April's 2009 rate was only 5.6% and the last time the PSR rate was this high was back in April 1993.

But what does a PSR of 6.9% actually mean?  Are Americans really saving more than they have in over a decade? 

The PSR measures personal savings as total disposable personal income less personal outlays (expenses). A lot happened in the last couple months that has pushed up personal income and pushed down personal outlays, which drove up the PSR.