U.S. consumers ramped up their spending on material goods during the pandemic and haven’t looked back, and economists are wondering jus𝔍t how long the shopping spree will last.

As the chart below shows, consumer spending on goods surged in 2020 even after adj✨usting for high inflation, while spending on services has rebounded although not yet to its pre-pandemic trend. Juꦆst how sustainable is that surge in spending though? 

That’s a pretty big question considering that consumer spending is the backbone of economic growth. Shopping has been bolstered by the unusually high wage increases workers have enjoyed amid a roaring labor market, but the Federal Reserve’s 澳洲幸运5官方开奖结果体彩网:anti-inflation interest rate hikes have made the 澳洲幸运5官方开奖结果体彩🍎网:growing mountain of credit card debt more expensive, and banks have gotten more 澳洲幸运5官方开奖结果体彩网:tight-fisted about lending. 

Concerns about credit loom larger the more people spend away the 澳洲幸运5官方开奖结果体彩网:savings they stockpiled during the pandemic. 

“Positive real disposable income growth and credit have supported spending habits in the near-term, but it’s hard to say this will continue since consumers will eventually be impacted from record-high credit card rates on all-time high outstandin💯g balances,” Jeffrey Roach, chief economist, and Jeffrey Buchbinder, chief equity strategist at LPL research wrote in a commentary.  “A slowdown in demand for services looks increasingly likely with consumers under the weight of tighter credit cond🅷itions.”