As corporate profits have risen, inflation softened, and speculation about when the Federal Reserve would begin to lower interest rates, something of concern has been moving in the background — consumer spending.
According to recent U.S. Bureau of Economic Analysis data, consumer spending represents approximately 68.9% of gross domestic product. Let that sufficiently slip and the economy could slide into a recession.
The BEA's personal incomes and outlays report for April 2024, released on May 31, 2024, was not pleasing in real terms — that is, after the effects of inflation. Real disposable personal income (DPI) and real personal consumption expenditures (PCE) were down 0.1% in April from March.
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