Consumer spending in the United States increased 3.1% during the third quarter of 2023 compared with the preceding period in seasonally adjusted data.

With that, consumer spending in that nation contributed 2.1 percentage points to the increase in real GDP.

It remains to be seen whether consumers will be able to sustain this pace of spending, especially given recent news that the savings glut from the pandemic-era stimulus has likely been exhausted. 

Since consumer spending refers to the total amount of money people spend on goods and services, this indicator is crucial in gauging the overall health of the economy, accounting for a significant portion of a country’s GDP.

Consumer spending

Previously, this spending increased 3.8% in the first quarter of 2023 and then rose 0.8% in the second quarter, according to data from the U.S. Department of Commerce.

That country’s economy grew 4.9% in the third quarter of 2023 and is now up 2.9% year over year from where it was in the third quarter of 2022. 

The most recent quarter’s GDP data represents the fastest growth rate for any quarter since 2014. 

On the global economy, the International Monetary Fund (IMF) indicated that progress in fighting inflation has led to slower economic growth. 

World Economy

In its October 2023 World Economic Outlook, the IMF projected that global economic output growth is expected to slow from 3.5% in 2022 to 2.9% in 2024. 

It also projects economic growth in advanced economies to plummet from 2.6% in 2022 to 1.4% in 2024.

For the U.S., growth is projected at 2.1% in 2023 and 1.5% in 2024. 

The forecast is revised upward by 0.3 percentage points for 2023 and 0.5 percentage points for 2024, compared to the projections in the July 2023 report update, due to stronger business investment in the second quarter and resilient consumption growth, reflecting a still-tight labor market.