Despite high inflation and rising interest rates, the US consumer has continued to power the global economy.

But are cracks now forming in that picture? And what does that mean for investors?

I'm Allison Nathan and this is Goldman Sachs exchanges.

There's no one I'd rather talk to about this than the three colleagues sitting with me at the table today

David Miracle is our chief US economist and Kate McShane and Bonnie Herzog co-lead coverage of the retail sector.

David Kate and Bonnie, it's great to have you on the program.

Thanks, Allison.

Thank you.

Thank you.

So David, given how high inflation and interest rates have been over the last couple of years. I think a lot of people

have been somewhat surprised by the strength and resilience of the US

consumer. What's your outlook for the consumer at this point? Is it going to

give out at some point?

Yeah, there certainly has been a lot of pessimism over the course of the last couple of years.

There have been concerns about running out of pandemic savings.

There have been concerns about the sustainability of the very low saving rate and

there have been concerns about the impact of higher prices on consumer spending power

especially for lower income households. My take would be most of these concerns are overblown and that the

basic outlook is a lot simpler than that, that many of these concerns overcomplicate

things. We are seeing real income grow at a solid pace led by a strong labor market that is generating good job gains and a healthy pace of wage growth and we have historically further increases in household

in aggregate and we're seeing further increases in household wealth

that should drive a positive wealth effect to consumer spending.

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