Exchanges Can the US consumer stay strong?
Jul 30, 2024
In this insightful discussion, David Mericle, Chief US Economist, alongside consumer experts Kate McShane and Bonnie Herzog, dives into the resilience of US consumers amidst economic pressures. They analyze the impact of rising inflation on spending habits, highlighting the shift from discretionary purchases to essentials. The guests explore labor market stability and its connection to consumer strength, as well as how various income groups are adapting their shopping behaviors. Their expert insights provide a compelling look at the future of consumer spending.
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Consumer Resilience
- The US consumer remains resilient due to strong real income growth and positive wealth effects.
- These factors outweigh concerns about pandemic savings, low saving rates, and high prices.
Labor Market Dynamics
- Although unemployment is rising, layoff rates are low, and labor demand remains healthy.
- Job growth is strong but hasn't kept pace with increased labor supply from immigration.
Delinquency Rates
- Rising consumer delinquency rates are partly due to normalization after pandemic-era lows and riskier lending practices.
- The adjustment of spending back in line with income mostly occurred in 2022.