Consumer Spending - GCSE Business Definition

Consumer spending refers to the total amount of money individuals and households use to purchase goods and services within an economy. It is a crucial component of economic activity, often influencing economic growth, as it reflects the demand for products and services.

For GCSE Business students, understanding consumer spending helps explain how consumer behaviour impacts businesses and the broader economy, including how changes in consumer confidence, disposable income and interest rates can affect the levels of spending.

Consumer spending is a key indicator of economic health, as higher spending generally signals a thriving economy, while lower spending may indicate economic difficulties.