Consumer-spending growth allowed the US economy to dodge contraction territory late last year, and the source of strength was not the wealthy, but rather low-income consumers and millennials.
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 US metro areas, according to data released today by the JP Morgan Chase amp; Co. Institute. Those same groups were leading contributors to consumption gains in October and November.
Separate government data showed consumer spending more than accounted for all economic output gains in the fourth quarter, counteracting drags from weak business investment and a slowdown in international trade.
Those under 25 accounted for nearly 1 percentage point of overall spending growth, JP 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.