What typically occurs during an economic expansion?

During an economic expansion, the overall economy experiences growth, which leads to increased consumer confidence. As people feel more secure in their jobs and see an improvement in their financial situations, they tend to be more willing to spend money. This increase in consumer spending is driven by optimism about future economic conditions, as individuals and families feel they can afford to make larger purchases, such as homes, cars, and other goods and services.

In this context, consumers are inclined to save less because they believe that their income will continue to rise or remain stable, alleviating concerns about future financial insecurity. This contrasts with periods of economic downturn, where consumers often save more and reduce spending out of caution. Hence, during an economic expansion, the trend of consumers spending more and saving less reflects the overall growth and positivity in the economy.