Rate Cuts Won’t Quickly Ease Strain on Consumers
As consumers go, so goes the US economy — and the pressure is evident. Plus: Prediction markets give the debate win to Harris.
Apple Inc. bets on the US consumer.
Photographer: David Paul Morris/BloombergTo get John Authers' newsletter delivered directly to your inbox, sign up here.
As the driving force of US economic growth, the financial health of the US consumer matters. The fear when the Federal Reserve embarked on its hiking cycle was that it would pile on to consumers’ cost of credit and, possibly, drive a recession. More than two years later, the recession isn’t here, yet. Pandemic stimulus checks plus wage increases have kept consumers going even as credit costs soared. But the strain is growing unmissable. Ian Shepherdson of Pantheon Macroeconomics points out that the way spending is outpacing growth in incomes is unsustainable: