The real drag on the US economy - the American consumer

Washington

American consumers aren't what they used to be, and this helps explain the plodding economic recovery. It gets no respect - despite creating 14 million jobs and lasting almost seven years.

The great gripe is that economic growth has been held to about 2 per cent a year, well below historical standards. This sluggishness reflects a profound psychological transformation of American shoppers, who have dampened their consumption spending, affecting about two-thirds of the economy. To be blunt: We have sobered up.