- Bank of America Merill Lynch economists warn against impact on consumer spending of protracted trade war
- Consumer confidence is dropping and people are cutting back spending
- Reasons given: government shutdown (lower-income households); stock market selloff (upper-income households)
Bank of America Merrill Lynch economists have warned that a prolonged trade war ‘could have a meaningful impact on consumer spending.’
In a note released today the firm said that US consumers have responded negatively to the worsening trade war between America and China. There has also been a drop in consumer confidence and according to economists consumers have been cutting back on their spending since the start of 2019.
As a reason lower-income households cited the government shutdown, while upper-income households blamed the selloff in the stock market.