Consumers are propping up the US economy, but they're going into debt to do so
foxbusiness.com'Barron's Roundtable' host Jack Otter discusses Biden's economy as the Treasury Secretary Janet Yellen is expected to take aim at Trump's economy and Big Tech stocks' impact on markets.
Americans' commitment to spending, even in the face of high inflation and interest rates, has kept the U.S. economic engine running for the past two years, but that may finally be coming to an end.
Households are draining their savings and racking up a historic amount of credit card debt, which could finally bring to an end the post-COVID-19 spending spree.
«Americans with jobs and money in their pockets are going to spend. However, as the economy slows as we move through the middle portion of this year and the labor market softens, we continue to believe the holiday spending that occurred last year was a bit of a last hurrah for the consumer,» Scott Wren, Wells Fargo senior global market strategist, wrote in a note on Wednesday.
The Commerce Department reported Thursday that the economy grew at a more rapid pace than expected in the final three months of 2023, powered in part by a stronger U.S. consumer.
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A woman shops for household items at a retail store in Rosemead, California, on Jan. 19, 2024. (Photo by FREDERIC J. BROWN/AFP via Getty Images / Getty Images)
Gross domestic product (GDP), the broadest measure of goods and services produced across the economy, increased by 3.3% on an annualized basis in the three-month period from October through December. That is far higher than the 2% increase forecast by Refinitiv economists, although it marks a notable drop from the rapid 4.9% pace seen during the third quarter.
Consumer spending, which accounts for about two-thirds of
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