Question

Why is consumer spending so important to the economy? What will happen if there was no consumer spending?

Answer 1

Consumer spending is the speding done on goods bought by households. It inculudes both products and services. Anything a person spends on, is consumer spending. Be it haircuts, a PlayStation 4, an iPhone, some fruits or Burger.

Consumer spending is extremely important for an economy for various reasons. The biggest is that it literally constitutes nearly 70% of the economy. If we look around, we can see so much economic activity around consumer spending. Transport of groceries for supermarkets, companies advertising new phones, everything that Amazon or walmart sell and more.
It is also important because its a very good indicator of how economy is doing. If consumer spending is down, economy is down. If its up, sentiments are high and economy is on upwards trajectory.

If there was no consumer spending, then the economy will only be left with government and corporate spending. Corporate spending will also go down by a huge amount as after all, most corporates themselves depend upon consumer spending. Economy will fall by nearly 80%, most people will lose jobs and everything will collapse. It is clear that consumer spending is very important.