The Conference Board’s Chief Economist said there are “significant roadblocks” ahead that could cause consumers to cut back on their spending this fall. The board’s Dana Peterson made that comment earlier this week on CNBC’s “Small Business Playbook” virtual event.
“For the first time in a long time, consumers are saying that their current situations and their expectations for the future are very optimistic,” Peterson said. “For most of this year, consumers were saying right now is okay, but we’re worried about the future; we think a recession is coming.”
Peterson sees three major areas of concern. The first relates to the aggressive interest rate hikes made by the Federal Reserve over roughly the past year and a half.
Second, pandemic-era savings that are already being depleted are likely to be exhausted during the upcoming fall.
Third is the restart of student loan payments, which will cut spending. Loan payments will be due in October, according to the U.S. Department of Education following a three-year pause. It is estimated around 40 million Americans have debt from their education totaling nearly $1.8 trillion, and the typical monthly bill is $350.
“Certainly, for the second half of the year, we’re going to see slower consumer spending,” Peterson said.
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