skip to main content
Briefing

United States: Consumption

Appears in: North America, Macroeconomy, United States

Critical Issues

Background:

From the early 1990s until the recent financial crisis, U.S. consumer spending rose faster than income, buoyed by easy credit conditions, the wealth effects of rising house prices and returns from financial markets. However, the erosion of housing and financial-sector wealth driven by the financial crisis that began in 2007, and the millions of job losses resulting from the ensuing recession brought about a severe retrenchment in consumer spending. The fiscal stimulus package, including initiatives like the “cash for clunkers” program, helped to boost consumer spending in 2009. However, as the effects of the stimulus support fade, protracted weakness in the labor market, reduced consumer credit availability and a possible climb in the savings rate as households attempt to deleverage and increase their net worth are likely to dampen a self-sustained recovery. Given that consumption accounts for around 70% of U.S. GDP, slow consumption growth has huge implications for the wider economy, as well as the global recovery.

Access to this content is restricted to RGE clients.

If you have a client code, please enter it here to activate your client account.

Click here for a free trial.

Learn About Our Services:

RGE Research

Our dynamic and intuitive macroeconomic research platform keeps you on top of the extraordinary shifts that transform our global economy, allowing users to uncover unique connections and insights. Discover the resource central banks and that 70% of the world's leading hedge funds, asset managers, PE firms, banks and corporations around the world depend on.

Our market strategists build on the work of our macroeconomic research team, incorporating market dynamics to answer crucial questions and generate actionable investment recommendations. RGE's Market Research and Strategy team gives clients actionable insight across six key asset classes:

• Currencies • Commodities
• Credit • Equity • Gov’t Bonds / Rates
• Emerging Markets • Financials
• Cross Asset Model Portfolio

RGE Strategy

Sometimes, reading research is not enough. Many RGE clients participate at the Roubini Direct Access level to gain a deeper understanding of specific issues. Through interactive live sessions, we engage with world-class thinkers, encourage knowledge sharing, idea generation, risk identification and validation of client initiatives.

Learn More »

For information on becoming an RGE Client, please speak with an RGE Representative in New York at +1 212-645-0010, or in London at +44 (0) 207 092 8850, or email americas@roubini.com for the Americas, europe@roubini.com for Europe, the Midddle East and Africa, and asia@roubini.com for Asia/Pacific.

Associated Readings

Research Federal Reserve Alan Greenspan and James Kennedy March 2007 Sources and Uses of Equity Extracted from Homes Analysis Federal Reserve Bank of San Francisco Reuven Glick and Kevin J. Lansing May 15, 2009 U.S. Household Deleveraging and Future Consumption Growth Analysis McKinsey Susan Lund and Charles Atkins March 2009 The economic impact of increased US savings Blogs Nouriel Roubini's Global EconoMonitor Jul 17, 2008 American Un-Beauty: The Crisis of the Suburbian (McMansions and Gas-Guzzling SUVs) Way of Life Research CEPR Center for Economic and Policy Research Dean Baker and David Rosnick July 2008 The Impact of the Housing Crash on Family Wealth

Publications

Our Research
?

Our Thoughts
?

Outlook Center
?

Central Bank Watch
?

Key Views
?

Scenario Analysis
?
RGE Clients can activate their account by updating Manage My Account

Top 10 Most Read

Our Research
1. Belated White Knight: ECB Policy Options for the EZ Recession and Credit Crunch
Global Macro-Market Outlook
2. Macro-Market Overview: May 2013
Our Thoughts
3. The selloff in Japanese equity
Our Thoughts
4. Downplaying the hawkish signal in the April FOMC meeting minutes
Our Thoughts
5. The fall in China’s Flash PMI and 2013 growth prospects
Our Research
6. Summary of Key Views
Our Research
7. Europe’s Playbook for Financial Crises
Our Thoughts
8. Differences and similarities in Brazilian and Mexican inflation numbers
Our Research
9. Recent U.S. Data Signals Suggest Slow and Steady Activity
Our Research
10. The Other Fat Tail: Monetary Policy and Bubbles

ROUBINI FEEDBACK FORUM

What Do You Think?
Weigh in on Roubini.com's new look or report any problems you encounter.

Website Feedback Content Feedback