The U.S. consumer accounts for over 70% of the U.S. economy. Our ability to spend money recklessly appears to finally be catching up with us. For those still holding out for a second half economic recovery I’ll point you to this chart:
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Consumer spending has only declined minimally from peak to trough thus far. In both the ’73 & ’81 recessions consumer spending declined 2.5%+ year over year before bottoming. We have yet to reach that level and in my opinion this recession is far more devastating than either of those.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.