U.S.: Will Consumers Save The Day? Keep Your Fingers Crossed

Confidence is dropping, but spending may stay healthy a while longer

Household America has been riding high. Since early last year, consumer spending has grown more than at any time since the boom years of the early 1980s. In fact, households have accounted for more than twice the economic growth that capital spending has contributed. But now, as tighter financial conditions and weaker global demand hammer the business sector, the pressure is on households to keep on spending. If this 7 1/2-year expansion loses consumers, a recession will be difficult to avoid.

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