Consumer Spending, Engine of the U.S. Economy, Is Under Strain
The New York Times • • business
Key Points:
- Angie Howard, who works from home in Portland, has not faced higher gas costs directly but has noticed increased prices in groceries and other expenses since the Middle East conflict began.
- Despite a stable income, Howard is cutting back on discretionary spending, such as travel and dining out, due to rising costs and inflationary pressures.
- Consumer spending, which drives two-thirds of the U.S. economy, remains crucial but is under threat from sustained high oil prices, volatile markets, and eroding household finances.
- Americans are experiencing reduced savings and increased financial anxiety, with the University of Michigan's consumer sentiment survey hitting a record low amid concerns over inflation and declining asset values.
- The ongoing economic challenges, including high inflation and geopolitical tensions, may significantly impact the resilience of U.S. consumer spending and the broader economy in the coming year.
