However, for many high-profile market watchers, it’s become a question of when, not if, consumers will become more reluctant to splash their cash-and receiving increasingly big credit card bills every month could weigh on sentiment. That robustness has persevered through 2023, fueling stronger-than-expected GDP growth in September and leading the White House’s Council of Economic Advisers to label consumers a “salient force.” economy remain unexpectedly resilient, even in the face of spiraling living costs and increasingly hawkish monetary policy from the Federal Reserve.
economy, which has been leaning heavily on consumers over the past couple of years.Ĭonsumer spending, coupled with a strong labor market, has helped the U.S. “When real interest rates rise or the prices of goods rise faster than wages, consumers will face difficulty repaying existing balances without either cutting expenses or receiving a windfall,” the report’s authors wrote.Ī growing reliance on credit cards-and difficulties paying balances back-could spell trouble for the wider U.S.
