Consumer Spending Reflects New Priorities after the Recession

Accounting for approximately 70 percent of the nation’s GDP, personal consumption expenditures represent the backbone of the American economy. During the current economic recovery, personal consumption has continued to expand despite modest and erratic income growth, high unemployment, higher taxes, and higher energy and food prices. Factors contributing to the consumer’s resiliency are many, with strong financial asset market performance, recently improving housing market conditions, and a slowly improving labor market all working to support growth in personal consumption.