US economy will need more than just consumers in 2016: Goldman Sachs

New York

IN 2015, American consumers put the economy on their backs. Next year, however, the economy will need to be firing on more cylinders in order to keep eating into slack, according to Goldman Sachs.

In three of the past four quarters, real personal consumption expenditures (or PCE) have accounted for more than all of headline economic growth in the United States - that is, net exports, investment, and government spending have been a cumulative drag on those occasions: "The slowdown in the US economy over the last year could have turned out much worse, if not for support from a traditional source: domestic consumer spending," wrote senior economist Zach Pandl. "Solid consumer spending - underpinned by healthy labour income - has been enough to keep GDP growth above trend." Such a development isn't novel, but it's far from common. In the past 200 quarters on record, the growth in consumer spending has contributed more than 100 per cent of GDP growth in less than one third of instances.