J.P. Morgan: Consumer spending is a key support for the US economy

J.P. Morgan: Consumer spending is a key support for the US economy

January 11, 2021

United States
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Consumer spending is a key support for the US economy

US consumer spending showed remarkable resilience last year, largely thanks to the huge amount of fiscal stimulus injected into the economy. Spending patterns did shift away from services and towards goods purchases, but the overall level of retail sales quickly recovered to the pre-Covid trend. As the latest wave of the pandemic puts renewed pressure on employment, more support for the US consumer is now on the way with a second round of stimulus cheques agreed in late December as part of a $900bn stimulus bill. In addition, with the Democrats now set to take control of the Senate following the run-offs in Georgia, the new administration will likely view another fiscal package as a near-term priority. Despite the recovery in the labour market clearly slowing, we expect consumer spending to remain a key support for the US economy over the coming months.

Index level, rebased to 100 in January 2018

JPMorgan_Insights_Weekly_Brief_EN

Source: BEA, Refinitiv Datastream, J.P. Morgan Asset Management. Data as of 8 January 2021.

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