Consumers account for about 70 percent of all economic activity, making them a key driver of overall growth.
The nearly 5-year recovery has been subdued, in part, because consumers have not experienced the wage growth to restore spending to pre-recession levels.
However, households have reduced debt since the Great Recession of 2007-2009, giving them a bit more leeway to spend. Banks have unloaded the bad loans that piled up in the financial crisis and are lending again to businesses. The percentage of companies that increased their spending on capital equipment the first three months of the year was the highest in more than two years, and plans to increase capital investment also rose sharply, according to a survey released Monday by the National Association of Business Economists.
A Federal Reserve survey released last week showed economic growth picking up across most of the United States over the past two months as the weather improved. Ten of the Fed's 12 regions reported an increase in economic activity, according to the Beige Book survey. Only the Cleveland and St. Louis districts reported slower growth.
The Fed has been scaling back its efforts to help the economy, deciding last month to reduce its monthly bond purchases by $10 billion. The $55 billion in purchases are meant to keep long-term interest rates low and to encourage borrowing and spending. Still, Fed Chair Janet Yellen has said the economy needs more help. The Fed has kept short-term rates near zero.
The Great Recession ended nearly five years ago. But unemployment remains high at 6.7 percent, and 3.7 million Americans have been out of work for six months or more.