Making room for increased consumer spending requires reducing the level of exports by allowing the currency to appreciate.

But the resulting economic slack gives us the historic opportunity and need to compensate for low consumer spending with increased investment spending on sustainable technologies.

The rise in consumer spending was not, however, due to higher employment or faster income growth.

Real personal consumer spending grew at a robust 4.4 rate, as spending on consumer durables soared by 21 .

But these are impeding the consumer spending needed to boost economic activity and kick start growth.

Unfortunately, the projected recovery in consumer spending didn t occur.

Recent data on consumer spending in the United States have been terrible.

Meanwhile, cuts in social and welfare spending are only making things worse, as employment and consumer demand fall further.

The key driver of the increase in final sales was a strong rise in consumer spending.

Higher domestic consumer spending would otherwise create inflationary pressures.

If that decline continues, it will inevitably reduce the pace of consumer spending.

This would require politically difficult shifts in consumption and investment, with America increasing its savings and China increasing domestic consumption.

The past relationship between wealth and consumer spending implies that each 100 of additional wealth raises consumer spending by about four dollars, so 2.5 trillion of additional wealth would raise consumer spending by roughly 100 billion.

To raise consumer spending, the Chinese government must reverse both of these trends.

Consumer spending is particularly robust, as wages show signs of upward movement.

Lower share prices will now have negative effects on consumer spending and business investment.

The resulting fall in wealth has reduced consumer spending, while the decline in homeowners equity prevents borrowing to finance any increase.

The magnitude of the relationship between the stock market rise and the jump in consumer spending also fits the data.

That figure matches closely the fall in household saving and the resulting increase in consumer spending.

The US Congress and the Bush administration enacted a 100 billion tax rebate in an attempt to stimulate consumer spending.

Their analysis found a clear tendency for austerity programs to reduce consumption expenditure and weaken the economy.

But, looking ahead, the five year plan will cause the saving rate to decline, as China seeks to increase consumer spending and therefore the standard of living of the average Chinese.

Even for those taxpayers who had feared a tax increase in 2011 and 2012, it is not clear how much the lower tax payments will actually boost consumer spending.

Obama has emphasized the need for a green recovery, that is, one based on sustainable technologies, not merely on consumption spending.

A spike in long term rates would lower the price of JGBs, destroying household wealth and, in turn, reducing consumer spending.

A major obstacle to higher consumer spending is the current condition of the housing market.

To be sure, there is no proof that QE2 led to the stock market rise, or that the stock market rise caused the increase in consumer spending.

Gains in inflation adjusted personal consumption expenditure have averaged a mere 0.8 over the past five years the most severe and protracted slowdown in consumer demand growth in the post World War II era.

In 2008, Africa s combined economic output reached 1.6 trillion, and consumer spending totaled 860 billion.

Oil exporters could, in turn, promise to increase domestic consumption expenditure, which would boost imports.

Although consumer spending has increased during the past four quarters, helped by substantial government transfer payments, the pace of spending growth by households was less than the overall pace of GDP growth, because households were increasing their rate of saving.

First, spending on high return public investments should be increased.

But, for now, America and Europe cannot expand their consumer spending without increasing exports, while China and the emerging markets cannot easily expand their production or consumption without the guarantee of strong Western markets.

Growth in inflation adjusted US personal consumption expenditures has just been revised down to 1.5 in the second quarter of 2012, and appears to be on track for a similarly anemic increase in the third quarter.

These investments are needed in the short term to offset the decline in worldwide consumption spending that underlies the global recession.

Likewise, during expansions, higher government spending is more likely to crowd out private spending.

(d) Consumer Lending (CLP)

Consumer fraud

Russian military expenditures have increased by double digit figures in recent years.

Without further declines in the saving rate from this very low level, consumer spending will not continue to grow as robustly.

Not surprisingly, survey measures of consumer sentiment fell sharply and consumer spending remained almost flat from month to month.

They note that construction activity is rising, home prices are declining more slowly, disposable personal income increased in the first quarter, consumer spending is up, and the labor market is improving.

This favorable performance led private forecasters and government officials to predict continued strong growth in 2011, with higher production, employment, and incomes leading to further increases in consumer spending and a self sustaining recovery.

Combine this with the continued fall in housing prices, and it is understandable that consumer spending remains depressed.

As the US economy bottomed out in mid 2009, consumers entered a second phase a very subdued recovery.