The current economic crisis is shaping up to be different than others Americans have weathered in the past 20 years in an important respect, the Washington Post reports: consumer spending, which the nation could always count on to propel the economy through, has stalled. Real spending, the catalyst behind 70% of GDP, has been flat or down since June, and economists predict the third quarter will show the first decline in spending since 1990-1991.
The consumer price index increased 4.3% in the second quarter compared to last year, at the same time falling wages, spiking unemployment, and dwindling credit were tightening purses. Even in the months after the 9/11 attacks and Hurricane Katrina spending grew 1-2%, but some economists predict a decline of 1-2% in coming quarters.
(More consumer price index stories.)