The American consumer has bad news for the economy
The US economy is consumer-driven. When people spend money, companies keep employees in their jobs, and those workers keep spending.

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Consumers are the backbone of the US economy. When people spend money, employers keep their employees employed... and these workers continue to spend. Theoretically, at least.
The consumer spending of America accounts for 70% of its gross domestic product. It is therefore nearly impossible to have a recession if spending increases.
Wall Street is worried about Friday's retail report. It is expected to reveal that the American consumer has slowed down.
Retail sales are expected to have fallen 0.4% from March of last year. Goldman Sachs analysts and Bank of America analysts claim that core sales, which exclude autos, gasoline and building materials, have slowed down by about 1%. Retail sales in February also decreased by 0.4% compared to January.
The data for March come only days after minutes from a Federal Reserve meeting revealed that central bankers believe the recent banking crises will push the US into a recession this year. Fed economists are forecasting a recession for the first time during the current rate-hiking cycle.
Bank of America data on credit cards shows that spending has cooled. Analysts on Thursday reported that after a strong start to the year, credit and debit card purchases at the Bank of America grew by 0.1% in March. This is the lowest rate since February 2021.
The analysts at BofA said that despite the tax burden, the consumer health in the United States is relatively good.
Analysts said that while there were fears of a possible impact on spending and lending due to the stress in the banking sector, this is unlikely to be the case.
They attribute some of the weak March data to the lack of tax returns.
The Internal Revenue Service reported that the slowdown in Federal Tax Refunds in March contributed to the weakening of spending. In March 2019, the IRS issued tax refunds worth $84 billion, which is about $25 billion less compared to March 2022. According to BofA analyst, that's around 1.5% of monthly income.
Look at the numbers. While American bank account balances are still relatively robust, they are beginning to shrink. This is a very concerning situation.
According to a WalletHub study, consumers added $398 billion of new debt in the fourth quarter 2022. This is the fourth largest buildup in that time period over the last 20 years and almost 4.5 times greater than a year ago.
The number of bankruptcies is also increasing. According to S&P Global Market Intelligence, US corporate bankruptcy filings reached a 12-year-high in the first two month of 2023. 183 companies filed for Chapter 11 according to S&P Global Market Intelligence.
In recent months, Party City, Avaya and mattress manufacturer Serta Simmons, as well as Independent Pet Partners (a pet store retailer) have all filed for bankruptcy.
According to credit rating agencies, Bed Bath & Beyond and Rite Aid are also under bankruptcy watch. These companies have been struggling for many years and are the most vulnerable to economic conditions.
What's next? Retail sales for March are due to be released on Friday, 8:30 a.m. ET.
The AI Wars march on
Big Tech invests heavily in artificial intelligence, to keep up with the competition.
CNN's Catherine Thorbecke reports that Amazon wants to let its investors know that it will not be left out of the latest AI arms race.
Amazon CEO Andy Jassy wrote to shareholders in a letter on Thursday that the company was 'investing heavily" into the technology behind chat bots such as ChatGPT.
Jassy's letter to shareholders stated that he has been working on his own large language models for some time. He believes it will improve the customer experience in virtually all areas. Jassy will continue to make substantial investments in these models in order to enhance our experiences as a seller, a brand, a creator, and primarily our consumer.
Google, Facebook parent Meta, and Microsoft all have talked about their increasing focus on generative artificial intelligence technology. This can generate compelling essays, stories, and visuals based on user prompts.
Amazon, Jassy said, wants to provide cheaper machine learning chips to smaller companies so they can train and run AI on their own.
Jassy told CNBC that most companies do not want to spend billions on training and years to get the best language models.
Jassy, a CNBC analyst, said that Jassy's clients wanted to be able to build on a model foundation that was already big and good, but then customize it to suit their needs.
Manhattan rents can be incredibly expensive
Rents are starting to fall across the nation, but not in New York City.
Anna Bahney of CNN reports that renting an apartment in Manhattan has never been more expensive than it was this March.
In March, the median rent for an apartment in Manhattan stood at $4,175. According to a report by Douglas Elliman and Miller Samuel, a brokerage and appraisal and consulting firm, this is up 12.8% compared to last year and up 2% compared to February.
A two-bedroom flat had a rent median of $5,680. This is up 18.3% compared to last year. Studio apartments rent for $3,190 on average, an increase of 16% over last year.
Renting a two-bedroom apartment in Manhattan on average costs $68,160 per year. This is before the cost of basic utilities like heat, internet and electricity. The average national salary in 2022 will be around $60,575.
Rents in Manhattan remained high in March due to the fact that mortgage rates had doubled in comparison to a year earlier, making home ownership unaffordable. Miller said that the failure of a few banks in March may have created an atmosphere of uncertainty, which encouraged people to consider renting instead.
According to the report leasing activity increased by 20.5% in February and was up 15.4% on last year.