Goldman: Here's 3 Reasons The Consumer Rebound Is Going To Sputter Out

Goldman Sachs’ Jan Hatzius lays out three reasons the recovery will sputter out. Specifically they expect consumer spending growth to fall from a current rate of around 3.25% to 1-2%:

  • The recent strength in consumer income is inconsistent with real household income. Any improvement in the labour market will be offset by the end of the stimulus.
  • The savings rate still hasn’t risen to historical averages, so that represents a coming drag.
  • Consumer confidence data doesn’t match the current brisk rate of spending. Instead it suggests spending growth of merely 1-2%.

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