Savings Rate Falls To The Lowest Level Since 2007 [AUDIO]

While the recent increase in consumer spending is fending off fears of another recession, it's coming at the expense of our savings accounts.

The government has reported that on average, consumers put 3.6% of their cash into savings in September which marks the lowest level of saving since December 2007, when consumers stashed away only 2.6% of their income.

That isn't necessarily a bad sign. The government's latest report on U.S. economic growth showed that since July, consumers have started to slow down the amount they add to their savings to ramp up their spending. "It really indicates that people feel confident enough to be spending more," said Maury Randall, Chairman of the Finance Department at Rider University. "The economy has been rough for quite a while and yet the savings rate has been higher for quite a while. I think consumers were feeling a bit more optimistic so they loosened the pursestrings a little bit."

That's not to say that the spending will continue. "When it comes to the labor market and unemployment rates, the economic environment is still bad. But, at least for a little while in September, people felt a little more optimistic," said Randall.

"People had been holding back for some time and saving at a relatively high level," said Randall. The savings rate was as high as 7.1% in mid 2009. "Whether or not this consumer spending pattern continues and remains to be seen."

The increase in spending comes as consumers saw their disposable income fall 1.7% in the third quarter. Without an increase in income, consumers may not be able to afford to keep increasing their spending at the pace that they have.