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.

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 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.

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.

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

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 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.

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

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.

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.

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

(d) Consumer Lending (CLP)

Consumer fraud

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

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.

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.

But the timing of the stock market rise, and the lack of any other reason for a sharp rise in consumer spending, makes that chain of events look very plausible.

This 600 billion fall in demand is more than 3 of GDP. If not reversed, it will cause further cuts in production, employment, and earnings, leading to further reductions in consumer spending.

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

That meant that the acceleration of growth in consumer spending accounted for nearly 100 of the increase in GDP, with the rise in durable spending accounting for almost half of that increase.

With the benefit of hindsight, we now know that the 12 year pre crisis US consumer spending binge was built on a precarious foundation of asset and credit bubbles.

The rapid rise in saving has reduced consumer spending, slowing the pace of GDP growth in 2009 and in early 2010.

Low interest rates eventually jump started the expansion through a house price bubble that supported a debt financed consumer spending binge and triggered a construction boom.

Academic research has shown that the national ACSI score is a strong predictor of Gross Domestic Product (GDP) growth, and an even stronger predictor of Personal Consumption Expenditure (PCE) growth.

Weak demand especially the post crisis collapse in consumer spending growth is a far more likely culprit than China in explaining the recent hiring shortfall.

The austerity plans being adopted by governments in much of Europe and elsewhere around the world, and the curtailment of consumption expenditure by individuals as well, threaten to produce a global recession.

Cooperation can turn the sharp and frightening decline in worldwide consumption spending into a global opportunity to invest more in the world s future well being.

But the 1990 s was a decade of slow growth, and households devoted a rising share of their incomes to maintaining their level of consumer spending.

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