Fitch warns: US consumer spending could be further constrained

International credit rating agency Fitch Ratings reported that weakening consumer confidence due to inflation and tight credit standards due to stress at regional banks are expected to contribute to the slowdown in consumer spending. Fitch said in a statement that real income growth excluding nominal wage increases remains relatively weak. It was conveyed in the statement that consumers have continued to save an average of $88 billion per month since July 2022, or 0.5 percent of annual consumer spending, but it was noted that estimated excess savings decreased by 52 percent from its peak of $2.2 trillion in August 2021 to $1 trillion as of March. The statement stated that the support provided by excess savings is now approximately 20 percent of the increase in spending capacity. It was emphasized in the statement that the support provided by consumer spending from savings will probably end by the last quarter of this year, and that weakening consumer confidence due to inflation and tight credit standards due to stress at regional banks are expected to contribute to the slowdown in consumer spending.