According to a report released by the government Monday, personal consumption expenditures (consumer spending) rose by 0.1% in February. This miniscule increase follows two months of 0.2% declines and has resulted in consumer spending at an all time low.
With the economy improving and more jobs being added, it seems that consumer spending should be increasing. So why the sluggish growth?
Americans may just be doing a lot more saving these days. Experts have indicated that more consumers are showing fiscal responsibility since the recession. Savings are up to 5.8% - the highest level since late 2012. Many are also investing in retirement, houses, or savings for college education.
Others think winter may have played a huge factor. Consumers were less likely to leave the house, so spending decreased.
Overall though, consumers have spent less this year, so there will be very little growth in the economy this quarter. However, Barclays is predicting a strong comeback for spending in the spring.