'Excess savings', household debt and spending

A cross-country analysis

The unstoppable US consumer

The recovery in consumer spending since the heights of the pandemic has been very different across economies.

Real consumer spending by UK households, for example, remains below pre-COVID levels. It has also been relatively weak in the euro area, Japan and Canada.

In contrast, the recovery in spending has been more robust in the US, New Zealand and Australia. Part of the strength in the Antipodes, however, reflects strong population growth.

The outperformance of the US consumer is even starker when focusing just on the retail sector.

The resilience of recent growth in US consumption also stands out when compared with pre-COVID averages. On this basis, real consumption growth over the past year has been weak, to very weak, across the Antipodes, Europe and Canada.

Why has the US consumer been so much more resilient?