America’s Spending Engine Just Stalled — What That Means for the Markets

📢 About This Summary

This summary is based on Kitco News’ interview with economist E.J. Antoni, edited and annotated by Time Health Capital. Our team distills expert commentary and market insights to help investors understand the deeper implications behind economic headlines.

“They are tapped out — the American consumer is officially broke,” said Antoni, warning that years of stimulus, inflation, and debt-driven consumption have left households without reserves to sustain growth.

📉 The Consumer Engine Has Lost Momentum

The U.S. economy has long relied on household consumption — roughly 70% of GDP — as its primary engine. But as Antoni highlights, that engine is sputtering. Credit card debt has surged past record highs while savings rates have collapsed to levels not seen since before the 2008 crisis.

Households are spending more to maintain the same standard of living, not because of confidence, but necessity. Inflation has forced consumers to stretch every dollar further, using debt as a lifeline rather than a lever for growth. The result is an economy that looks healthy on the surface — yet increasingly hollow underneath.

💰 Real Wages, Real Pain

Even with nominal wage growth, real wages — adjusted for inflation — have stagnated or fallen for many workers. Essentials such as food, rent, and healthcare now consume a greater share of take-home pay, leaving little room for discretionary spending.

Antoni notes that this erosion in purchasing power undermines the very base of the U.S. economy. Without disposable income, consumer-led recoveries lose their momentum. “The government keeps pointing to spending data,” he says, “but what they don’t say is that it’s fueled by credit, not income.”

⚠️ The Credit Cliff Ahead

As credit card delinquencies rise and borrowing costs climb, the margin for error tightens. Many households are now one missed paycheck or medical bill away from financial distress. Antoni warns that this dynamic creates a self-reinforcing cycle: falling consumption leads to weaker growth, which in turn pressures jobs and incomes.

“The American consumer is not just tired,” Antoni remarks. “They are tapped out.” The implication is clear — the era of stimulus-driven demand is ending, and policymakers may find their old tools ineffective in a leveraged, overextended economy.

💬 What It Means for Us

At Time Health Capital, we view this shift as a structural signal rather than a temporary slowdown. The financial system is moving from a consumption-led phase to a balance-sheet repair phase — and that transition is never smooth. Investors should expect volatility across credit markets, consumption-sensitive equities, and even consumer staples.

Preserving liquidity and focusing on tangible assets, including gold and productive real estate, can provide ballast when debt-driven demand unwinds. Resilience now matters more than chasing yield. Understanding the psychology of the “tapped-out consumer” helps identify which sectors will falter — and which ones can thrive amid deleveraging.

❓ Questions & Implications for Investors

• How sustainable is consumer-driven growth when credit expansion hits its limit?
• Which asset classes can protect purchasing power as real wages stagnate?
• Could this shift mark the early phase of a longer credit contraction cycle similar to 2008–2010?

🎥 Prefer to Watch the Full Discussion?

Watch the full Kitco News interview with E.J. Antoni here:

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