Joe Public vs. the U.S. Economy By Michael McDonough About this article: Try winning a hockey game against a team with a five-on-three power play. This is essentially the challenge facing the U.S. economy as consumers remain in the penalty box. Personal consumption is by far the largest component of the U.S. economy and, historically, a recovery in consumer spending has been the catalyst for any eventual recovery. Over the past few months, the personal consumption expenditures report (PCE), aided by government stimulus and modest gains in income, has shown some marginal improvements, as can be seen in the chart below, which shows the primary contributors to real GDP growth. However, shrinking consumer credit, modest income gains (at least partially due to elevated unemployment) and unstable home values have all hurt consumers' buying power and willingness to spend. Contributions to Quarterly Real GDP Growth Bureau of Economic Analysis The... To read the rest of this article and sign up for a FREE trial click here...

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