The personal savings rate in the US, (measured by the Bureau of Economic Analysis), has dropped to 3.1%.  Edward Harrison, who has been following the personal savings rate over the last couple of years at Credit Writedowns, believes that there is a "strong correlation" between asset prices and savings rate.  He argues that when asset prices go up, the savings rate goes down.  And since asset prices have "skyrocketed," Harrison is not surprised by the drop in the savings rate.  But, he says his is one of three possible explanations for the savings rate dropping from last spring's high of 6.4%:

1) Asset prices are increasing. The wealth effect and the decrease in debt-related stress associated with this increase has allowed consumers to resume their prior consumption patterns. This is where I have focused in the past.
2) Debt-related stress is still acute, particularly because of continued high rates of unemployment. This has caused consumers to draw down savings in order meet basic material needs.
3) A surge in strategic defaults has left consumers with more money to spend and is boosting retail sales.

Read Harrison's detailed analysis of the Three potential explanations for the continued fall in US savings rate here.