Consumer spending is the U.S. economy's main driver. Here's how it's doing

"The American economy is a consumer economy. These days, consumer spending accounts for around 70% of the gross domestic product. And what's GDP? It's the economic output of a nation - the added-up value of all the final goods and services a country produces at home. So while Wall Street makes its bets on potential profits on chip manufacturing or what the Federal Reserve plans to do about interest rates, we're going to take a look now at the economy's main driver."

"I would describe the situation as pockets of trouble. Overall, the economy's actually still in pretty good shape. We've yet to have the recession that so many have warned about the past few years. In general, GDP's growing. Unemployment's still pretty low on a historical basis. Consumers are still spending, sometimes because they have to because things cost more, and sometimes because they want to on discretionary items, like travel."

Consumer spending accounts for about 70% of U.S. GDP, making household purchases the primary engine of economic output. GDP is growing and unemployment remains low by historical standards, sustaining overall economic strength. Many consumers continue spending both out of necessity due to higher costs and on discretionary items such as travel. However, there are concentrated signs of distress: subprime auto loan delinquencies now exceed levels seen during the financial crisis, and student loan delinquencies are markedly elevated. Approximately one in four federal student loan borrowers are either in default or close to it. Utility bill delinquencies are also rising among vulnerable borrowers.

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