The financial health of the U.S. consumer

The spending and saving habits of the household sector play a major role in the U.S. economy. Consumer spending accounts for two-thirds of gross domestic product (GDP). A rise in consumer debt as a percent of disposable income has sparked concerns that this sector is overextended and may begin to experience financial difficulty. This article examines the household sector's finances from the standpoint of income, wealth accumulation and debt burden. It concludes that although individual households will experience difficulties, overall the consumer's financial position appears to be sound and does not portend an imminent downturn in the economy.