|Russ Koesterich, CFA – BlackRock
4 Reasons Why The Consumer (and the economy) are Still in Limbo
Summary: Despite stronger economic momentum and historically low unemployment rates consumer spending has been slowing. Koesterich points out four reasons why this may be the case. First, wage growth is not accelerating. Second, auto spending, which has made up roughly 20% of retail sales historically, has been decelerating. Third, savings rates are low, which means that consumers do not have much more room to increase spending. Lastly, consumer spending habits are changing. Retail sales data only captures physical purchases and services are accounting for a greater portion of consumer activity.