Will 'Frugal Consumers' Lead to Tepid U.S. GDP Growth?

Filed under: Forecasts, Economic Data

Given the size and complexity of the U.S. economy, forecasts regarding U.S. GDP growth must be viewed with caution: they contain a margin of error, and are subject to substantial revisions. Even so, with consumer credit card-based purchases continuing to decline, one conclusion investors can draw is that U.S. GDP growth probably will be lower during this expansion than it was during previous post-Cold War era expansions.



One major reason? Historically, consumer spending has account for 65% to 70% of U.S. GDP. If consumer spending remains modest, it's highly unlikely that the economy will be able to grow as fast as it typically does when consumption is high.

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Will 'Frugal Consumers' Lead to Tepid U.S. GDP Growth? originally appeared on BloggingStocks on Wed, 08 Sep 2010 17:10:00 EST. Please see our terms for use of feeds.

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Economic growth - Consumer spending - Economy of the United States - BloggingStocks - U.S. GDP

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