Spending is up, unemployment claims are down, but consumer confidence in the US economy is still low.
According to The Associated Press, despite the fact that Americans are spending even as inflation rises and seeking for jobless benefits at the lowest rate in decades, experts are nonetheless concerned.
Consumer spending in the United States increased by 1.3 percent in October, more than twice the 0.6 percent increase in September, according to the Commerce Department. Prices, on the other hand, increased 5% over the same period last year, the fastest 12-month inflation rate since the autumn of 1990.
“Despite falling consumer confidence due to high inflation in the fall, households continue to spend,” said Gus Faucher, chief economist at PNC Financial.
Personal incomes, which are a leading sign of future expenditure, increased by 0.5 percent in October after falling by 1% in September. The reduction was attributed to the termination of various government assistance programs. Companies in desperate need of labor are likely to blame for the increase, giving employees power to demand raises or higher beginning rates.
The increase in expenditure, according to analysts, is hopeful indication that the economy is on the verge of a significant rebound in the current quarter.
In a note to clients, Gregory Daco, chief U.S. economist at Oxford Economics, said, “After facing one of the most severe economic shocks of the previous century in 2020, the U.S. economy has displayed one of the most rapid recoveries in modern history in 2021.”
In the quarter from July to September, growth dropped to 2.1 percent. Unless the recent increase in COVID cases or rising inflation affects Christmas shopping over the next month, the third quarter, which begins in October, is likely to aid the economy’s recovery.
See the list below for more Associated Press reporting.
The rise in prices for everything from petrol to rent, on the other hand, is sure to be the most talked-about economic statistic over Thanksgiving dinner.
Their financial accounts were also bolstered by government stimulus payments earlier this year. This bodes well for a successful holiday season, and big US retailers claim they’re prepared after some corporations, such as Walmart and Target, went to great pains to ensure that their shelves were stocked despite significant shortages.
GDP is expected to rise to 5.6 percent growth in the upcoming quarter, according to Daco.
Meanwhile, the number of people seeking for unemployment benefits in the United States has increased. This is a condensed version of the information.