Consumers are obviously very important for the economy, with their spending accounting for more than two-thirds of economic output.
The consumer has played a vital role in helping the economy rebound from the economic slump caused by the outbreak of Covid-19 in March 2020. Consumer spending rose a solid 3.1% annualized in the fourth quarter.
Generous aid from the government helped consumers along, with about $5 trillion spent on fiscal stimulus to combat the pandemic.
Monetary stimulus has helped, too, with the Federal Reserve more than doubling its balance sheet to $8.9 trillion as of last month from $4.2 trillion in February 2020, shortly before the pandemic emerged.
But now consumers are showing signs of cracking. Retail sales grew only 0.3% in February from a month earlier, after a 4.9% gain in January. Excluding gas stations, where prices are soaring, retail sales actually dipped 0.2% last month.
Online sales slid 3.7%. Sales fell at furniture and electronic stores as well as health and personal care outlets.
