Consumer Spending Defies Expectations, Fueling Economic Growth Despite Looming Uncertainties
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Consumer spending has remained strong, defying expectations and fueling economic growth. Higher income households have $28 trillion more wealth since 2020.
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Economists don't expect spending to continue at this pace as savings dwindle and consumers rely more on credit. However, the resilience of spending has surprised economists.
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Job growth, low unemployment, and rising wages, especially for lower paid workers, have supported consumer spending. Most households are better off financially than before the pandemic.
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Wealthier households accounted for most of the pandemic savings and are spending more on experiences, travel and dining out. Small business owners see more high-dollar spending.
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Concerns remain about student debt payments resuming and potential government dysfunction, but impacts on spending remain uncertain. Visa reports continued strength in consumer spending.