U.S. Outlook: Will consumers save the day?
I’m skeptical that U.S. consumers can keep the slowdown, which is centered in manufacturing and business investment, from seeping into other corners of the economy.
U.S. consumers won’t be able to keep spending at a growth rate of more than 3% in the quarters ahead. We forecast real consumer spending at just below 2% in the second half of 2019 and slipping well below 2% next year, as the risks from the global slowdown, trade wars, tighter financial conditions, and fading fiscal stimulus continue to mount.
For more on this, see highlights of my report below, followed by a link to the full U.S. Outlook, delivered on June 28.Key observations:
- We can’t count on the U.S. consumer to keep spending at a growth rate of more than 3%
- Monthly job growth will continue to slow in the quarters ahead
- Household balance sheets are fine now but may weaken as home price growth slows
- Average hourly earnings growth remains below real consumer spending growth rates
Read my full report.