McKinsey has calculated that US consumer spending is on track to reach $11 trillion in 2020, nearly double its $9 trillion annual growth from 2020 to 2025.
It has also estimated that US manufacturing employment will increase by 7.6 million over the same period, driven by increased use of the internet and smart technologies.
As a result, the McKinsey Global Institute has calculated the US economy is on course to overtake China in terms of annual growth, the first time in more than a century that the world has seen such a feat happen.
The McKinsey report is based on the company’s latest forecast for the US, which shows US spending at a record $10.5 trillion in 2021, an increase of more than 12 per cent over the previous forecast.
It says spending is set to rise by 6.1 per cent in 2021 as the economy improves, to a record of $10 trillion.
However, the report warns the increase in spending will not come cheap.
“As consumer spending grows, there will be greater demand for energy and food,” the report said.
“This will require continued investment in fuel efficiency and energy efficiency programs, as well as an increased emphasis on environmental sustainability and sustainable food production.”
The McKinseys report comes after the US and other major economies suffered from the financial crisis and recession.
“With the economy now growing again, there is renewed optimism about the future of US consumers, and they want more,” McKinsey managing director John Strydom said.
The report has been widely criticised by consumer advocates.
They say that the report underestimates consumer demand and underestimates the size of the financial system.
“The McKinsey study assumes that the financial sector will be completely restructured, while it ignores the impact of the recession on consumers,” said Elizabeth Korte, a senior fellow at the Consumers Union think tank.
“That’s why the McKinseys forecast is wrong.”
The report also predicts a further drop in consumer spending due to a rise in car ownership.
However the McKinys report shows that the biggest winners are fast food chains like McDonalds, Burger King, Wendy’s, KFC and Pizza Hut.
The most expensive food items are coffee and tea, followed by food like hamburgers, pizza and fried chicken.
Meanwhile, the biggest losers are energy drinks, bottled water, and soft drinks.
The energy sector is expected to grow by about 8 per cent annually through 2021, with food, energy and consumer goods accounting for more than 80 per cent of that growth.