To help you understand the rise and fall in the U.S. economy, consumer spending and what that means to GDP growth, as well as what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest…
It turns out that consumers have more extra savings than economists believed. The latest GDP data indicate Americans have a combined $1 trillion more in savings than what they likely would have had without the jump that was caused by the pandemic when the government sent out multiple rounds of stimulus checks, and people had fewer opportunities to spend money.
That cash hoard has been falling, leading to expectations that consumer spending is bound to take a hit sometime soon. Now it looks like consumers, collectively, are not so close to being tapped out.
However, don’t expect all of those extra savings to get spent. Much of it is in the hands of wealthy consumers, who have likely invested the money or plan to do so. Still, the extra financial cushion will add a bit to GDP growth next year and in 2025.
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