The US economy is showing signs of weakness which is being seen as a huge negative by traders and investors. Economic reports over the last couple of weeks have suggested that the US economy has hit a roadblock. Many traders believe that the US economy is not out of woods yet and believes that the Federal Reserve might be forced to keep interest rates lower for the near term. There are many who believe that if the weakness in the US economy persists it could lead to a massive downtrend in asset prices across the globe which have been heading higher over the past few years on the back of the strong economic bounce back in the US economy
US household debt levels continued to remain mostly unchanged in the first three months of the year as consumers continued to show reluctance towards borrowing heavily. According to a report released by the Federal Reserve Bank of New York, total household debt ticked up by 0.2 percent to $11.85 trillion in the first quarter of the year. The figures suggest that lenders high standards and consumer reluctance continue to weigh on the economy. Americans spent cautiously during the first quarter even though gas prices plunged during the same period.
In some positive news reported last week, it was reported that the US consumers boosted spending in the month of March by the largest amount in four months giving hopes that this key sector of the economy is showing signs of a rebound. According to a report released by the US Commerce Department, consumer spending picked up by 0.4 percent in the month of March, the strongest increase since the month of November last year. Consumer spending is a very important aspect of the US economy as it makes up for 70 percent of GDP.