We hear a lot about cities and how much they contribute to GDP and innovation but there’s more to it than just business serendipity and hangouts for the Creative Class. Derek Thompson wrote a good piece on what’s happening in New York and what it says about larger trends.
“Urban planners and economists focused on creativity and networks have been singing the praises of the city-living since the Great Recession (or, perhaps, since forever). But local housing policy, limited family finances, and American geographical abundance—not to mention the pro-rural laws of U.S. representative government—are powerful centrifugal forces that push Americans ever-outward into suburbs with lawns, trucks, and cul de sacs. The last decade was a dream. It’s 2006, again.”
Americans are generally lackluster savers. Forty-one percent of households lack liquid savings to cover an unexpected $2,000 expense, according to research from the Pew Charitable Trusts, which also found that a lack of saving is a top financial worry, even among families with higher incomes.
One in three American families reports having no savings, including one in 10 of those with annual incomes greater than $100,000. Federal data show the overall personal savings rate in the United States is about 5 percent, and an analysis by Moody’s Analytics finds that Americans under 35 actually have a negative savings rate, meaning they are spending more than they earn.