Outlook for US consumption

The situation for American consumers is somewhat paradoxical at the beginning of the year. Labour income is accelerating strongly, but wage gains are more than offset by the rising cost of living. Such a loss of purchasing power should normally weigh on consumer spending going forward. On the other hand, the financial health of households has rarely been better, whether in terms of asset valuations, debt servicing or delinquency rates. On the face of it, households can withstand ...