When recession warnings hit a fever pitch last year, the only thing reassuring people like Bank of America CEO Brian Moynihan was that Americans were still spending. High U.S. consumer spending, thanks to $2.5 trillion in excess savings accumulated during the pandemic, has helped guard against a severe economic downturn, but that buffer is vanishing fast, and the economy could be on the verge of a recession because of it.
With inflation at risk of rising more, strong consumer spending is no guarantee, and the economy would look very different if Americans slow their purchases. That moment may be closer than you think, according to economist and former Treasury Secretary Larry Summers.
