The Spending Revolution: How Americans Keep Having Fun Despite Higher Interest Rates
Recent data from the U.S. government reveals that consumer spending is driving strong economic growth, defying economists' predictions of a recession. Despite rising borrowing costs and depleted savings, consumer spending has remained robust, fueled by factors such as sturdy hiring, low unemployment, and healthy finances for most households. Wealthier households, in particular, have seen substantial growth in home values and stock portfolios, contributing to their increased spending. While economists caution that spending may cool in the coming months, the durability of consumer spending has caught the attention of Federal Reserve officials. However, challenges such as student loan repayments and potential government shutdowns could impact consumer spending in the future.