, Columnist
A Strong U.S. Consumer Is a Lagging Indicator
Spending is always strong and unemployment low at the onset of a recession.
Consumers are feeling pretty good, but that’s no sign of where the economy is headed.
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Investors who are optimistic about the outlook for the U.S. economy and financial markets due to reports of healthy consumer spending, retail sales and an unemployment rate that held near a 50-year low in August need a history lesson.
Even though consumer spending accounts for about two-thirds of the economy, it was a poor predictor of the last two recessions, which occurred from March to November 2001, and from December 2007 to June 2009. A slowdown in spending coincided with the start of the first recession and lagged behind in the second.