Journal Article
Negative Sentiment toward Spending and Declining Real Incomes May Meaningfully Lower Consumption
Abstract: Despite a contraction in real GDP in the first half of 2022, consumer spending has remained resilient. We examine a set of factors that have historically affected consumption growth and find that excess savings have boosted consumer spending during the COVID-19 pandemic. However, as excess savings decline and economic relationships normalize, negative sentiment toward spending and declining real incomes may meaningfully lower consumption.
Keywords: consumers; consumption; pandemic; savings;
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https://www.kansascityfed.org/Economic%20Bulletin/documents/9227/EconomicBulletin22CakirMelekPollard1108.pdf
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Bibliographic Information
Provider: Federal Reserve Bank of Kansas City
Part of Series: Economic Bulletin
Publication Date: 2022-11-04
Issue: November 4, 2022
Pages: 4