More than half of 526 respondents said that personal consumption — the most important driver of economic growth — will shrink in early 2024, which would be the first quarterly decline since the onset of the pandemic. Another 21% said the reversal will happen even sooner, in the last quarter of this year, as high borrowing costs eat into household budgets while Covid-era savings run down.
Economists at Goldman Sachs Group Inc. expect the consumer to outperform yet again in 2024 — and keep the economy growing — amid steady job growth and pay hikes that beat inflation.Researchers at the Federal Reserve Bank of San Francisco say the excess savings that have helped consumers get through the price spike will run out in the current quarter — a sentiment that three-quarters of the MLIV Pulse respondents agreed with.
And another kind of debt — student loans — is about to come due again for millions of Americans who benefited from the pandemic freeze on repayments. Asked what they consider a good leading indicator, MLIV Pulse respondents pointed to everything from the most standard measures – like retail sales or credit-card delinquencies — to airline bookings, pet adoptions, and the use of “Buy Now Pay Later” installment plans.