They struggle with the personal saving rate because it’s a derivative number — that is, it’s not measured directly. Instead, the Bureau of Economic Analysis derives the saving rate from other estimates. Here’s how it’s calculated:2
- The Bureau of Economic Analysis subtracts payroll and income taxes from personal income to get disposable personal income.
- The Bureau then subtracts its estimate of personal outlays — expenditures, interest payments, and payments — from disposable personal income to get an estimate of personal saving.
- The Bureau concludes by dividing personal income — the number the Bureau started with — by personal saving.
As currently structured, the U.S. Personal Saving Rate does not include capital gains from the sale of land or financial assets in its estimate of personal income. This effectively excludes capital gains — an important source of income for some.