Why are Americans spending so much? – By Nicole Narea (VOX) / May 18, 2024
They say the economy is bad, but they’re spending like it’s booming.
Americans have been pessimistic about the economy for years. Weirdly, that’s seemed to have little impact on their willingness to open their wallets.
Retail sales surged during the pandemic as home-bound workers clicked “complete purchase” on everything from Pelotons to sourdough starter. In 2020, e-commerce sales rose by 43 percent. Stimulus checks gave Americans newfound savings and excess money to burn. Supply chains couldn’t keep up with the demand.
That was all supposed to come crashing down at some point. For more than a year, economists warned about the “death of the consumer” and a resulting recession — neither of which have materialized. Consumers were expected to retreat as inflation skyrocketed, hitting a 9.1 percent peak in June 2022 and remaining stubbornly above the Federal Reserve’s target rate of 2 percent.
Instead, Americans just kept buying more, even accounting for price increases and beyond growth in their disposable income. Their spending helped drive US economic growth in 2023 and remained high in the first months of this year. In March, consumer spending increased by 0.8 percent, exceeding expectations from financial analysts.
CONTINUE > https://www.vox.com/money/24159281/consumer-spending-economy-inflation-interest-rates
