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Consumer Spending Expected to Continue Rising in 2024 Despite Economic Challenges

Despite a dip in savings and concerns over a potential recession, consumer spending is forecasted to grow, supported by excess pandemic savings and a resilient job market.

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Overview

  • Consumer spending showed a modest increase in January 2024, continuing the trend from 2023 despite the Federal Reserve's interest rate hikes.
  • Americans are saving less, with the personal saving rate dropping to 3.8% in January, raising concerns about the sustainability of spending levels.
  • Excess savings from pandemic stimulus, estimated at $850 billion, are expected to support consumer spending into 2024.
  • Consumer confidence remains mixed, with personal finances viewed more positively than the overall economy.
  • Experts warn of a potential slowdown in spending due to dwindling savings and high levels of debt, but a severe recession is not universally anticipated.