Commentary
Consumer spending drives two-thirds of the U.S. economy. But the resolve of American consumers will be put to the test. The stock market, tugged by fears of high interest rates, has gyrated most of the year. Year-over-year inflation has risen to heights not seen in more than 40 years. The bottom is threatening to fall out of home prices. As for jobs? Headline numbers remain strong, but layoff announcements are piling up and many companies have instituted hiring freezes.
Official gross domestic product (GDP) numbers declined in the second quarter, pushing the U.S. economy into technical recession. While economists and politicians argue over the semantics of what defines a recession, such arguments would quickly be rendered moot if American consumers decide to materially tighten their purse strings. …