Consumer-spending growth allowed the U.S. economy to dodge contraction territory late last year, and the source of strength was not the wealthy, but rather low-income consumers and millennials.
Wall Street Journal staffer Eric Morath, reporting on an analysis on local consumer spending from JP Morgan Chase and government spending data, notes that younger consumers and those with lower incomes punched above their weight class in the final months of 2015 fueling a 2.35% increase in year-over-year spending in December in 15 U.S. metro areas. Morath writes:
Those under 25 accounted for nearly 1 percentage point of overall spending growth, J.P. Morgan data said. Those under 35 accounted for nearly the entire gain, 1.9 percentage points. Americans ages 55 and older, conversely, slowed their spending in December compared with a year earlier, according to the data constructed from more than 14 billion anonymized debit and credit card transactions. But maybe we want them to be saving their money so that they can make a down payment on a home?