A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.
New YorkCNN —
There’s just one thing keeping the US economy afloat: You.
Interest rates are higher and so are prices, credit is drying up and there are signs that the labor market is finally softening. But Americans keep on spending lots of money, and as long as that continues, the chance of recession remains low.
The problem is that no one, not even the Federal Reserve, knows how much longer the American consumer can keep on spending.
What’s happening: The US economy expanded at a much faster pace in the first three months of the year than previously estimated, the Commerce Department reported last week. And consumer spending accounts for about 70% of America’s gross domestic product, the broadest measure of the economy, so it’s nearly impossible to enter a recession when spending is growing.
In theory, if people spend money, companies can keep employees in their jobs, and those workers then also can keep spending — it’s the circle of (economic) life, if you will.
Please read more at the below link:
https://www.cnn.com/2023/07/05/investing/premarket-stocks-trading/index.html