(CNN) — The strength of the US economy rests on the shoulders of consumers. If people are spending money, companies keep employees in their jobs … and those workers keep spending. In theory, anyway.

Consumer spending accounts for about 70% of America’s gross domestic product, the broadest measure of the economy, so it’s nearly impossible to enter a recession when spending is growing.

That’s why Wall Street is already fretting over Friday’s retail sales report, which is expected to show that the mighty American consumer is pulling back.

Economists forecast that retail sales fell 0.4% in March from the month before. But Goldman Sachs and Bank of America analysts say core sales — that’s without autos, gasoline, and building materials — slowed by about 1%. In February, retail sales also fell by 0.4% from January.

The March data come just days after Federal Reserve meeting minutes revealed that central bank economists think the recent banking crisis will tilt the US into recession this year. This is the first time in the current yearlong rate-hiking cycle that Fed economists have forecast a recession.

Bank of America credit card data shows that spending is cooling. After starting the year out strong, the bank’s credit and debit card spending eased in March to 0.1% year-over-year growth, said analysts on Thursday. That’s the slowest pace since February 2021.

A taxing problem: Still, the health of the American consumer is still relatively strong, the BofA analysts said.

While there was some fear that the banking sector stress would lead to fewer loans and slower spending, any possible drawback likely has little to do with the regional banking crisis, said the analysts.

Instead, they chalk some of March’s weak data up to a lack of tax returns.

“The slowdown in Federal tax refunds in March, as reported by the Internal Revenue Service (IRS), contributed to the weakness in spending,” they wrote. The IRS issued $84 billion in tax refunds this March, about $25 billion less than they issued in March of 2022. That’s about 1.5% of monthly disposable income, according to BofA analysts.

A look at the numbers: While American bank accounts are still fairly robust, they’re beginning to dwindle. That’s pretty concerning.

Consumers added a total of $398 billion in new debt during the fourth quarter of 2022 — the fourth highest build-up for that period in the past 20 years, and nearly 4.5 times larger than a year earlier, according to a WalletHub survey.

Bankruptcies are also piling up. US corporate bankruptcy filings hit a 12-year high in the first two months of 2023, with 183 companies filing for Chapter 11, according to S&P Global Market Intelligence data.

Party City, Avaya, mattress manufacturer Serta Simmons and Independent Pet Partners, a pet store retailer, have filed in recent months.

Bed Bath & Beyond, Rite Aid, Joann Fabric and other chains are also on bankruptcy watch, according to credit rating agencies. These companies have struggled for years and are most vulnerable to challenging economic conditions.

What’s next: March retail sales are due out Friday at 8:30 a.m. ET.

The AI wars march on

Big Tech is investing quickly, and heavily, in artificial intelligence to stay ahead of the competition.

Amazon especially wants its investors to know it won’t be left behind in the latest arms race over AI reports CNN’s Catherine Thorbecke.

In a letter to shareholders on Thursday, Amazon CEO Andy Jassy said the company is “investing heavily” in the technology that underpins chat bots like ChatGPT.

“We have been working on our own for a while now, believe it will transform and improve virtually every customer experience, and will continue to invest substantially in these models across all of our consumer, seller, brand, and creator experiences,” Jassy wrote in his letter to shareholders.

Since ChatGPT was released to the public in late November, Google, Facebook parent company Meta and Microsoft have all talked up their growing focus on generative AI technology, which can create compelling essays, stories and visuals in response to user prompts.

Amazon’s goal, according to Jassy, is to offer less costly machine learning chips so that smaller companies can afford to train and run their own AI.

“Most companies want to use these large language models, but the really good ones take billions of dollars to train and many years, most companies don’t want to go through that,” Jassy said in an interview with CNBC on Thursday morning.

“What they want to do is they want to work off of a foundational model that’s big and great already, and then have the ability to customize it for their own purposes,” Jassy told CNBC.

Manhattan rents are incredibly high

Rent prices across the country are beginning to ease, but not in New York City.

It has never cost more to rent a Manhattan apartment as it did in March, reports CNN’s Anna Bahney.

The median cost of renting an apartment in Manhattan was $4,175 in March. That’s up 12.8% from a year ago and up 2% from February, according to a report from Douglas Elliman, a brokerage, and Miller Samuel, an appraisal and consultant firm.

A one-bedroom apartment had a median rent of $4,150, up 9.6% from last year, while a two-bedroom apartment had a median rent of $5,680, up 18.3% from a year ago. A studio apartment rents for a median price of $3,190, up 16% from last year.

That means renting an average two-bedroom in Manhattan costs $68,160 a year. And that’s before basic utility costs like internet, heat and electricity. The national average salary in 2022 was about $60,575.

A main driver for rents remaining strong in Manhattan in March is that mortgage rates have doubled from a year ago, making purchasing a home unaffordable for many buyers. In addition, the failure of some banks in March created uncertainty that may have encouraged some people considering buying to rent instead, pushing the prices higher, said Miller.

New leases in March were up 15.4% from last year, according to the report, and leasing activity jumped 20.5% from February.

The American consumer has bad news for the economy