Trends in the US Service Sector and the Health of the Consumer

The US macroeconomy is now solidly on the back side of the business cycle, and there are challenges for both the service sector and the consumer. Although we are seeing disinflation, consumers are paying more. Some are therefore pulling back on discretionary spending in certain areas. This presents a new reality for companies that enjoyed high levels of activity coming out of the pandemic.

ITR Economics is forecasting that an economic downturn will begin in late 2023 and last through 2024. The health of the consumer helps inform our expectations for the service sector and how it will be impacted by the upcoming downturn. Labor constraints remain tight, and employment costs are elevated. However, the consumer is relatively well-positioned from both a wage and debt perspective.

The service sector is the US economy’s largest sector. It is heavily influenced by consumer health and spending. It is therefore important to understand the trends in consumer activity and what they are telling us to expect in the upcoming quarters.

This ITR Economics webinar will address the pain points currently facing businesses and consumers. We will discuss the changes and shifts in consumer income, debt levels, and savings, as well as the valuable business insights these factors provide regarding macroeconomic activity over the next two years. Thanks to ITR Economics’ long-term accuracy rating of 94.7%, webinar participants can plan with confidence for 2023 and beyond.

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