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Analysts warn protracted trade war can have negative affect on consumer spending

  • 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.