Fed officials will be keeping a close eye on consumer spending patterns because a slowdown could signal that we might be heading toward a recession. | REUTERS/Lucas Jackson/File Photo
Consumer confidence in the U.S. has held steady and spending has increased despite a slew of negative signs that point toward an economic slowdown. Federal Reserve officials admit that consumers are alone in carrying the burden of the economy.
“We’ve seen a decline in exports and weakening manufacturing data, reflecting slowing global growth and uncertainty related to trade and geopolitical risks. I am carefully monitoring” — John Williams, @NewYorkFed chief via @boes_ @economics @business https://t.co/dp2jgJFqC8
— Steve Matthews (@SteveMatthews12) September 4, 2019
Consumers are spending more despite headwinds
According to Federal Reserve Bank of New York President John Williams cited by Bloomberg:
“The consumer is now carrying all of the weight, or much of the weight, for growth going forward. One thing, though, about consumer spending that you have to be careful about is it’s not really a leading indicator.”
Williams’ comments are right on the money, as the consumer confidence index for the month of August came in at 135.1. This is slightly lower than the July reading of 135.8 but well ahead of the 129.5 reading that economists polled by Reuters were expecting.
What’s more, real personal consumption expenditures for Q2 2019 increased by 4.7 percent. That’s a significant jump over the 1.1 percent growth seen Q1 of this year and is the highest reading seen since Q4 2014 when the metric had increased 4.9 percent.
Real Personal Consumption Expenditures grew at a nice clip in the second quarter. » Read Full Article «