From NY Fed’s Liberty Street Economics:
The pattern of a similarly sluggish pace of recovery for discretionary and nondiscretionary services expenditures suggests that the fundamentals for consumer spending remain soft. In particular, it appears that households—more than three years after the end of the recession—remain wary about their future income growth and employment prospects even though consumer confidence measures have improved in recent months. In addition, households may still see the need to repair their balance sheets from the damage incurred during the recession, especially if they expect that increases in asset prices will be subdued at best and that credit will continue to be constrained. Consequently, a positive resolution of these issues is likely necessary before a stronger services and overall consumer spending recovery can be sustained.
Read the full post at NY Fed’s Liberty Street Economics