Weak U.S. Consumer Spending Underscores AI’s Critical Importance to Growth | Mohamed A. El-Erian @elerianm

The UMich consumer confidence survey's aggregate index declined this month, falling from 53.6 in October to 51.0. 

 

This drop was driven by the dual impact of high prices and income insecurity. Specifically:

• inflation expectations held steady at 4.5%, and 
• the ratio of respondents worried about higher unemployment in the year ahead rose to 68%. 

Compositionally, younger consumers suffered the largest drop in affordability confidence. 

 

When viewed together, this suggests that there would be a lot more worries about a recession if not for the strong pace of AI-related spending.

 

 #economy#inflation#growth#ai