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  • Writer's pictureSteve Coker, CFP

The Consumer Powerhouse




As anyone who has visited a mall or store recently can attest, Americans continue to shop. In fact, in large part, American consumers continue to power the economy – 67% of US GDP, a measure of the total economy, is consumer spending. Real Consumer Spending rose 2.7% year over year through the 4th quarter of 2023 to new record. It is one of the many statistics that show the economy still going strong, defying predictions of recession. Meanwhile, after-tax corporate profits rose to a new record, powering the rally in the stock market.


The widely predicted recession is still a no show. With the final 2023 GDP numbers released this month, the economy grew by 3.1% during 2023. Meanwhile, estimates for the first quarter of 2024 are currently 2.8%. Both of these figures reflect strong economic growth not a recessionary pullback.


Certainly, there is plenty to worry about, including inflation, the rising deficit, and war in the middle east and Ukraine. Nonetheless, consumers are spending, corporations are profitable, and that is a recipe for higher stock prices.


Inflation fell to 2.8% in February as measured by the core PCED, the Federal Reserve’s favored metric. We are still far above the Federal Reserve’s 2.0% target but have made good progress. Overall, there are good reasons the stock market has rallied. We can thank the American consumer for helping along the way.

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