America's Indebted Consumers - An Explanation for Poor Economic Growth

http://viableopposition.blogspot.ca/2013/04/americas-indebted-consumers-explanation.html

Consumer spending is the driver behind economic growth in today's economy.  Since consumer spending in the U.S. makes up roughly 70 percent of GDP (including spending on health care), rises and falls in spending by Main Street has a significant impact on overall economic growth.  

According to the Bureau of Economic Analysis, real personal consumption expenditures (PCE) increased by 3.2 percent in the first quarter of 2013 compared to 1.8 percent in the fourth quarter of 2012.  The biggest increase was seen in the purchase of durable goods, up 8.1 percent in Q1, down from an increase of 13.6 percent in Q4 2012.  It's buy, buy, buy time as you'll see on the next graph.

Here's a graph from FRED showing how real PCE has performed since just before the beginning of the Great Recession: