Hey Big Spender (Why So Quiet?)
- Apr 28, 2016
By Peter G. Hall, Vice-President and Chief Economist, Export Development Canada
Big spenders walk in to the room and immediately steal the show. Everyone wants to be with them, eager to catch a piece of the action. US consumers are that way: they're the richest in the world, and they know how to sling around their cash. They are a huge part of their own economy, but the world also relies on them to get and to keep things going. Recently, their spending activity has slowed. Is something going wrong?
Consumers are a big piece of any economy. Add up all their receipts in any given year, and it usually accounts for about 60 per cent of GDP. In the US, it's closer to 70 per cent, so when times are good, they're really good; and when they’re bad, well, everyone feels it. US consumers seemed unstoppable at the top of the last growth cycle. Optimism was high, productivity was strong, wages were rising and Americans were very active at the till. But they were so confident that they over-did it.
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