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07 March 2024 / Quick Take
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Copy LinkUS consumer spending held up remarkably throughout 2023. Whether this trend is sustained will determine the strength of the US economy in 2024. Will the interest rate hikes of the past two years slow US consumption in 2024?
Higher interest rates are finally affecting consumer behavior: faced with higher interest rates, many consumers are planning to reduce their debt, save more, and spend less. This is according to the 3,000 US consumers responding to The Conference Board Consumer Confidence Survey® in January 2024.
Overall, the survey shows that many consumers are reacting as expected to monetary policy tightening: downscaling spending and debt plans, while planning to up their savings. Altogether, these findings support The Conference Board view that consumer spending growth will cool in 2024, leading the US economy into a soft patch of relatively slow growth (but not necessarily a recession).
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