Slow Evolution of Consumer Spending

Consumer spending dominates the composition of the U.S. economy, trending at about 70% of gross domestic product (GDP). But how have consumers fared in the aftermath of the Great Recession and financial crisis that began 10 years ago? Data show that relative to other economic recoveries, consumer spending has rebounded at a much slower rate. And, there does seem to be some truth to the widely circulated idea that consumers have shifted their spending patterns, focusing more on experiences. However, this shift should not be overstated. There has been strong growth in consumer spending in traditional goods as well. Consumers have not taken on additional debt relative to incomes or GDP. Growth in spending may be slower than in other recoveries, but it also may be more durable.

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