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American Consumer Spending Indicates Economic Downturn





Date Published:
Author: CML News

Lede

Wall Street is concerned about the recent retail sales report that shows a decline in American consumer spending.

 

Summary

  • Consumer spending accounts for about 70% of America's gross domestic product, making it a critical factor for economic growth.
  • Retail sales fell 0.4% in March, while core sales fell by about 1%.
  • The Federal Reserve meeting minutes revealed that central bank economists predict a recession this year due to the recent banking crisis.
  • Bank of America credit card data shows that spending is cooling, with the bank's credit and debit card spending easing in March to 0.1% YoY growth.
  • BofA analysts suggest that the slowdown in Federal tax refunds in March contributed to the weakness in spending, adding that it's still relatively strong.
  • American bank accounts are beginning to dwindle as consumers added $398 billion in new debt during Q4 2022, with bankruptcies also piling up.
  • US corporate bankruptcy filings hit a 12-year high in the first two months of 2023, with several major chains on bankruptcy watch.

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