BY MARK ZANDI, BRIAN POI, SCOTT HOYT AND WAYNE BEST
A co-authored whitepaper with Moody’s Analytics and Equifax
Consumers are powering the U.S. economy’s growth. Businesses, housing, government and global trade are all modestly contributing to growth, but it is the consumer who is key to the economy’s performance. Consumers are not spending with the abandon they did in the boom and bubble prior to the Great Recession, but they are stalwart in their spending.
Benefiting consumers are strong economic tailwinds. The job market is healthy, creating lots of jobs across all pay scales in most regions of the country. With unemployment at near 4%, the economy is at full employment. Wage growth has been somewhat disappointing, but it is slowly picking up, and because of low inflation, real wage growth—nominal wage growth less inflation—is improving. Household leverage is low and credit is increasingly ample and cheap. Gasoline prices are off their recent bottom, but they remain low by most historical standards.