Nearly 70% of U.S. GDP comes from consumers. What happens when they stop spending?
3 signs cash-strapped consumers are nearing a ‘spend-pocalypse’ that would hurt the economy
In short
Everyday buyers are currently showing critical indicators of approaching a massive pullback in their overall purchasing activity. Because consumer spending accounts for nearly 70% of U.S. gross domestic product, the wider financial system remains vulnerable to shifts in household budgets. A sharp decline in these expenditures poses significant economic risks for the entire nation. Continued financial strain could therefore disrupt baseline stability across the broader economy.
Key points
- National economic growth depends heavily on sustained everyday purchases by American hous…: National economic growth depends heavily on sustained everyday purchases by American households.
- Reduced buying activity from cash-strapped individuals creates major downside risks for o…: Reduced buying activity from cash-strapped individuals creates major downside risks for overall gross domestic product.
- Severe financial cutbacks by households threaten to destabilize the performance of the wi…: Severe financial cutbacks by households threaten to destabilize the performance of the wider economy.