Shopping is dead

One data point that medium-term makes me uneasy about the economy is the fact that the U.S. savings rate hit 5 % in January, up from 0.1 % in January 2008. While even a 5 % savings rate is relatively low compared to most European countries, the change is hitting and will continue to hit GDP growth as U.S. GDP is around 70 % driven by consumption (savings rate = personal income - personal consumption).

This obviously, by definition more or less, affects consumer demand offline and online, resulting in, among other things, fewer searches with commercial intent.

So even if governments were to manage to shore up the banks this year and get lending going in the next 18 months, overall economic growth (including unemployment) would be slower than pre-credit crisis if the 5 % savings rate was to hold up as households would be paying off debt rather than consuming. Long-term debt repayment is a good thing, as the current U.S. household debt level is at record highs at over 100 % of GDP. Short- and medium-term it will be very painful for all companies selling to consumers or making money from helping others make consumers buy.