Bob Elliott
· Nonconsensus
· May 01, 2026 at 10:28
· ⏱ 4 min read
| Read on Substack ↗
Summary
The author argues that while US economic growth was adequate in the first quarter, it was driven by an unsustainable surge in dissaving from both households and businesses. This shift from an income-driven to a dissavings-driven expansion casts doubt on the durability of the current growth pace.
•US economic growth in 1Q was propped up by the fastest rate of dissaving (spending more than income) by households and businesses seen in the current expansion.
•The nature of the US economic expansion has transitioned from being income-driven to being dissavings-driven over the past couple of years.
•The reliance on dissaving makes it unlikely that the current pace of economic growth can be sustained for much longer.