The high growth and innovation that have been the hallmarks of the nation’s economy for the past two decades are coming to an end, Wells Fargo Senior Economist Eugenio Aleman tells the Silicon Valley / San Jose Business Journal.
His prediction has profound implications for the global economy over the next decade, according to the paper.
“Forget about everything you have become accustomed to during the last 20 years, because things are going to be very different going forward,” Aleman cautions in a report being distributed to Wells Fargo clients. “Today, we are witnessing the start of a new era for the U.S. economy and U.S. businesses, an era that will be very different from the 1990s and early 2000s, because the effects of the knowledge revolution have started to hit a wall. And this wall has a name: the U.S. consumer.”
For the past 20 years — as baby boomers moved through their peak spending years — consumers eagerly pulled out the plastic to take advantage of the latest innovations. But now, the Journal says, consumers, especially the large cohort of aging baby boomers, are expected to curtail spending as they pay off debt as well as prepare for and enter retirement.
The paper notes that Aleman makes it clear the weak consumer isn’t a temporary phenomenon due to the bursting housing bubble.