Fitch Ratings expects a marked slowdown in spending from 4Q23 as the labor market cools, wage growth slows, the boost to consumption from excess savings wanes, and the lagged effect of the Fed’s aggressive tightening cycle bites even more, according to Fitch’s new report. “Strong income growth has been largely responsible for the recent strength in consumer spending. However, wage income – the dominant driver of household income dynamics – looks set to slow as employment and wage growth weaken,” said Olu Sonola, head of U.S. regional economics. “Debt service is expected to trend higher in the coming quarters as ... (full story)