How Personal Savings Affect the Economy

Markets experienced a challenging environment in July with major indices ending the month slightly lower. However, this is in the context of healthy year-to-date gains and a broad market that is not far from its all-time high.

Consumer spending is the engine of the U.S. economy, accounting for roughly two-thirds of overall economic activity. In theory, when consumers feel financially secure and optimistic, they tend to spend more, driving corporate profits and economic growth. When they feel uncertain, they may tighten their belts.