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Consumer Spending Drops

March 27, 2023

Woman looking at phone and credit card with concern

The American consumer has been credited with supporting the U.S. economy through the pandemic and beyond. Consumer spending represents 70% of GDP. However, cracks appear to be forming. The Commerce Department reported that consumer spending fell 0.4% in February led by drops in auto sales, restaurants, furniture and clothing. The February drop came after a robust increase of 3.2% in January. Consumers appear to be focused on basic needs and are suffering from increased interest rates after a prolonged period of easy money. U.S. credit card balances have grown from $746.3 billion to $943.58 billion in the two periods ending January 2023 with many consumers facing credit card interest rates near 20%.

For more:
Credit card debt hits new high households near a breaking point | CNBC

The US consumer is starting to freak out | Fox Business