Americans Can t Stop Spending. Five Reasons Why. – WSJ

Americans prolonged spending spree has confounded economists and resulted in a surging U.S. economy. What s keeping their feet off the brakes?

A strong labor market, resilient savings stockpiles and rising values of their homes have consumers feeling good and willing to spend. Despite complaints about high prices, they are taking their children to concerts, packing movie theaters, booking luxury vacations, buying cars and covering the costs of rent and dinners out.

Strong spending caused economists to be wrong about a 2023 recession, though they still predict cutbacks ahead.

There are signs that Americans elevated spending habits aren t sustainable. Some 60% of Americans said they have fallen behind on emergency savings this year, according to a Bankrate survey. In September, they saved 3.4% of their income, about half the rate they saved in the fall of 2019, the Commerce Department said. And long-term interest rates which make it more expensive to buy homes and cars and to borrow money may only now be reaching the point where they will slow Americans roll.

via www.wsj.com

Enjoy while you can, I suppose. There is that 1930’s vibe.