Daily Gains Letter

Consumer Spending

Consumer spending is a measurement of how consumers are using their income to buy goods and services. It can be tracked by different indicators like retail trade sales, durable goods orders, and inventories at manufacturers. A decline in consumer spending can have many impacts on the overall economy. It can cause pressures on gross domestic product (GDP) growth and force companies to lay off their employees—meaning higher unemployment. But, the impacts of consumer spending on the U.S. economy are not just limited to those two examples. If consumer spending increases, investors can profit by investing in companies that are highly correlated with consumer spending, such as retailers.