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Quarter-End Insights

Economic Outlook: As World Growth Falters, the U.S. Consumer Rolls Along

Given stock market volatility, continued negative headlines out of China, and uncertainty over interest rates, one might rightfully expect consumers to be panicking. They are not.

  • China, the U.S. Federal Reserve, and a renewed slump in commodities dominated third-quarter news, pressuring equity returns around the world, especially outside the U.S.
  • Despite these pressures, the U.S. consumer continues to hold up well with restaurant sales, auto sales, and new home starts still in recovery mode.
  • 2015 U.S. GDP growth could top our long-term 2.0%-2.5% growth target, given a strong consumer, slumping imports, and increased government spending; however, we are sticking with our long-term growth rates as demographics limit long-term growth.

Robert Johnson, CFA does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.