Strong consumer spending ‘does not preclude US recession’

Federal Reserve Bank of Dallas
The Federal Reserve Bank of Dallas
Photo: Andreas Praefcke

Strong consumer spending in the US does not preclude a recession, argues research by the Federal Reserve Bank of Dallas. 

A new paper, written by Alexander Richter and Xiaoqing Zhou and published on January 2, states: “In every recessionary episode since the 1960s, consumption grew in the two quarters before.” 

The authors say that during previous recessions, falling consumption was not the main driver of declines in GDP. 

Consumer spending currently represents around two-thirds of GDP in the US

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