Consumer Spending Drops
March 27, 2023
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