The indomitable American shopper used to power the world economy. It was nice while it lasted.

One of the most telling signs of the new normal in the U.S. economy is Americans’ attitudes toward saving money. Ten years ago, saving was like making your bed or changing the oil in your car on schedule: Nice to do but hardly essential. During the brutal recession that began in 2007, people got more serious about saving. But as the economy recovered, Americans didn’t return to their old shopping habits, which amounted to spending almost their entire incomes, month after month. Instead, they decided to save even more.

This poll from Gallup shows the startling surge in Americans’ preference for saving over spending:

Source: Gallup More

The shift in attitudes among young people is most striking. In the early 2000s, 18- to 29-year-olds were the least interested in saving of any age group, with just 43% saying they prefer saving over spending. Today, they’re the most determined to save, with 66% saying that’s their preference. Among 31- to 49-year-olds, just 61% favor saving.

Americans don’t always do what they say they want to do, and the saving rate hasn’t soared the way the intention to save has. Here’s the percentage of disposable income people actually save, going back to 1940:

Source: Bureau of Economic Analysis More

That chart tells you a lot about how consumer finance has evolved during the last 50 years. The prolonged drop in the saving rate that began in the early 1970s coincided with the soaring use of credit cards and other types of consumer debt. By 2005, when the saving rate bottomed out at 2.6%, many consumers felt that buying a home amounted to saving enough, since the value of homes always went up. The epic housing bust that followed corrected that misunderstanding, plus the homeownership rate fell as foreclosures forced many former owners to rent, and others lacked the strong credit needed to qualify for a mortgage. Old-fashioned saving became popular again.

The saving rate is now 5.4%, which is still low by historical standards – but it’s slightly higher than the average of the last 15 years. And forecasting firm IHS Global Insight expects it to drift higher. “People still have a memory of what happened during the recession,” says IHS economist Chris Christopher. “Millennials, if they have money left after paying their student loans, do put money aside.”

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