The U.S. economy slowed in the second quarter of 2019 with GDP increasing at only 2%. Despite this, consumer spending is at the strongest it's been in over 4 years. Among other things, the trade deficit has been narrowing, and businesses have been ramping up their inventories likely in anticipation that demand will stay strong. However, economists are worried that growth will continue to slow down amidst the U.S.-China trade war. Gross domestic output (the average of GDP and gross domestic income) fell to 2.1% from 3.2% in the first quarter. The Federal Reserve is confident that the economy is growing at a good rate, but Jerome Powell said that the Fed would act accordingly to keep expansion on track.
One reason for such high consumer spending could be an anticipation that prices will rise as a result of tariffs being put in place. If consumers feel that prices will be rising in the near future, they'll spend more now in order to get more for their money. It's possible that we will see consumer confidence and spending start to slow down in the coming quarters, but for now consumers are happy to spend.
https://www.reuters.com/article/us-usa-economy-gdp/u-s-economy-slowing-but-consumers-limiting-downside-idUSKCN1VJ1J2
According to an article in The Balance, consumer spending increased by 0.9% in Q1 of 2019. It states that U.S. retail sales were soft. It mentions that total holiday sales only rose by 2.3%, which is lower than the average in the last 10 years which is typically 3.5%. It states that less consumers shopped during the Black-Friday weekend, and instead waited for online sales. Even though we are seeing consumer spending increasing, I wonder if the trend of decreasing consumer spending percentages will continue in the future.
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