Recovery to maintain pace despite headwinds

While the recovery in consumer spending is no longer gaining pace, we expect it to remain brisk over the next couple of years. Real earnings should pick up as inflation eases and further falls in unemployment strengthen workers’ bargaining power. And while the first rise in interest rates since 2007 may be only a matter of months away, the impact of rising rates on households’ interest payments in the near term is likely to be fairly small.