Is the U.S. Economy Starting to Stall?
Strong consumer spending and a robust jobs market have so far helped mitigate negatives like inflation, but they can’t last forever.
“The U.S. Consumer Is Starting to Freak Out,” opined Harriet Torry and Joe Pinsker for the Wall Street Journal today. “The engine of the U.S. economy — consumer spending — is starting to sputter.”
“Retail purchases have fallen in three of the past four months,” warned Torry and Pinsker. “Spending on services, including rent, haircuts and the bulk of bills, was flat in December, after adjusting for inflation, the worst monthly reading in nearly a year.”
“Sales of existing homes in the U.S. fell last year to their lowest level since 2014 as mortgage rates rose,” the WSJ continued. “The auto industry posted its worst sales year in more than a decade.”
Flush with largesse from the government stimulus programs that some critics called overly generous and generalized, “consumers snapped up exercise bikes, televisions and laptop computers for school children during lockdowns.”
When things opened up again, U.S. consumers went right on spending — eager, it would seem, to revisit their favorite dining haunts and entertainment venues.
A combination of factors has dimmed this rosy 2020/2021 picture from a population grown fat on…