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The U.S. consumer has always been considered “the backbone” of the American economy.
Indeed, consumer spending fuels business revenue and is a key driver of economic growth. The White
House recently declared that, “Consumption spending [by consumers] makes up two thirds of the U.S.
economy on average, so as the U.S. consumer goes, so goes the U.S. economy.”6
But the resilient American consumer is growing weary from the rising cost of living, high interest rates,
and mounting global risks. Indeed, Business Insider reports that:
“American consumers are finally showing signs of slowing as they blow through their savings,
and there are a handful of warning signs that the economy could soon tip into a spending
recession … A major pullback in consumer spending could force GDP growth to grind to halt …
pushing the overall economy into borderline recession territory.”7
The report further cites rising credit card delinquencies, falling personal savings8, slumping consumer
confidence, and a pullback in household spending as evidence that consumers are indeed “running out
of steam.”
6 https://www.whitehouse.gov/cea/written-materials/2023/10/30/as-the-u-s-consumer-goes-so-goes-the-u-s-economy/
7 https://www.businessinsider.com/economy-consumer-spending-credit-card-debt-delinquencies-retail-hiring-2023-11
8 https://fred.stlouisfed.org/series/PSAVERT
III. The Embattled American Consumer