The Ongoing Decline in Disposable Income and Savings
The Congressional Budget Office expects the U.S. economy to remain moribund in 2013 and to exit the year with an unemployment rate of eight percent. The Federal Reserve has already dumped roughly $3.0 trillion into the U.S. economy and is adding $85.0 billion a month to that total.
In a nutshell, Americans are out of work, and their dollar doesn’t go as far as it used to. Consumer spending might have been the workhorse for economic growth, but those heady days are over.
That could spell doom for the U.S. economy. After all, American consumers are the most important factor when it comes to U.S. growth. When consumer spending increases, the U.S. economy grows; similarly, when consumer spending pulls back, we experience an economic slowdown.
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