Consumer spending looks bleak going forward

Consumers are saving more, and paying down debt. Unless incomes start rising, this means lower consumption

US consumers have accounted for more than three-quarters of US GDP growth since 2000 and for more than one-third of global growth in private consumption since 1990. These trends were fueled by a surge in household debt,¹ particularly after 2000 (Exhibit 1), and a decline in the personal savings rate—to a low of –0.7 percent, in 2005. From 2000 to 2007, US household debt grew as much, relative to income, as it had during the previous 25 years.

Remember: one man's consumption is another one's income.