How Much More Can The Consumer Do?
Below is a chart representing the heavy lifting the U.S. consumer has been doing as a percentage of our GDP going back to 1965.
Source: Bureau of Economic Analysis
In the fourth quarter of 2001 the U.S. consumer, after a long uphill climb, finally hit 70% of GDP, peaking (thus far) at 70.51% in 2003 and again at the end of last year. How much more can the U.S. consumer do? How much more can we pump into the U.S. economy, and what would be the likely outcome of a consumer pullback? Looking at the chart, is it even conceivable that we're on the cusp of another leg up, or is it more reasonable to conclude that we're going to downshift for a while?