State of Consumer Part 1

Mar 25, 2024 | Macro Insights, No Bull Economics

Post-Covid Financial Conservatism Post Banner

The following chart provides a good representation of American consumerism by comparing the historical growth of personal consumption expenditures to the growth of personal income. After a steady trend from 1947, something very unusual happened post-covid… 


  • As evident in the chart below, the growth of consumer spending has steadily outpaced income growth from 1947 – 2020 as consumers presumably financed their extra spending with debt.
  • Then post-covid, consumers reigned in their spending to a level in line with their income growth. The key question is whether the long-term covid scare caused a permanent change to the mindset of consumers (in the same way the Great Depression changed future generations).
  • Initial post-covid data suggests that this may be the case, with consumers adopting a more conservative financial posture that may actually represent an economic strength over the long term.    

Real Personal Consumption Expenditures per Capita & Personal Income per Capita Graph

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