Overstretched consumers delay recession, but risk remains

Defiant consumer spending has helped the US economy avoid a recession so far, but consumers are saving less, accumulating debt, and spending beyond their means.

Experts like Michael Burry and Carl Weinberg have warned that overstretched consumers will eventually capitulate, choking off growth.

The personal savings rate has dropped close to 2008 lows and revolving credit card debt has climbed back to pre-pandemic highs.

Consumers may have averted a 2022 recession but did so by drawing down savings and piling on unsustainable debt loads.

If consumers pull back, it could sharply curtail consumer spending which accounts for 70% of GDP, likely triggering the economic downturn many have predicted.