The recent sharp decline in the saving rates of US households isn’t sustainable and will eventually erode consumer spending and, naturally, business, Martin Feldstein, former chairman of the Council of Economic Advisors, told CNBC Friday.
“Households are not saving much, the savings rate used to be 6 ¼ percent, it’s a full percentage point less than that, so that adds substantially to the increase in spending over the last six months,” said Feldstein, who is now a economics professor at Harvard and a member of President Obama's Economic Recovery Advisory Board.