WASHINGTON — A flow of recent data from the U.S. government has made one thing strikingly clear: A surge in consumer spending is fueling strong growth, demonstrating a resilience that has confounded economists, Federal Reserve officials and even the sour sentiments that Americans themselves have expressed in opinion polls, according to an Associated Press report.
Spending by consumers rose by a brisk 0.4% in September the government said Friday — even after adjusting for inflation and even as Americans face ever-higher borrowing costs.
Economists caution that such vigorous spending isn’t likely to continue in the coming months. Many households have been pulling money from a shrinking pool of savings. Others have been turning increasingly to credit cards. And the additional savings that tens of millions of households amassed during the pandemic — from stimulus aid and reduced opportunities to travel, dine out and visit entertainment venues — are nearly depleted, economists say.
Still, the truth is no one knows where things go from here, given the unusual nature of the post-pandemic economy. The “death of the consumer” and an ensuing recession have been forecast by most economists for at least a year. So far, not only is no recession in sight but consumers as a whole appear to be in robust health. Spending might cool in the coming months, yet it’s far from clear it will collapse.