Spending: Cautiously better
What it is: Consumer spending is simply a measure of how much individuals pay for goods and services.
Why it's important: Spending by individuals accounts for 70% of GDP, making it the single largest contributor to economic growth. When consumers are confident, they tend to spend more, which leads businesses to make more products and hire more people. But those economic gears stop turning when consumers rein in their spending.
Where we're headed: After a boost in consumer spending in the beginning of 2009, helped by government programs supporting auto sales and home purchases, spending has picked up very slowly. Consumers are still very cautious about the economy, especially as the unemployment rate hovers above 9%. Many economists believe consumers will continue to save more and borrow less in the near future.
NEXT: Stocks: Choppy amid uncertainty
Last updated November 23 2010: 10:39 AM ET
