The U.S. economic recovery is 'gaining steam' going into the fall
Consumer spending in August "accelerated" despite a Delta-driven surge in COVID-19 cases, increased demand, and backed-up supply chains that kept inflation raised, reports Fortune, according to Commerce Department data released Friday.
The 0.8 percent rise in spending is a sign "the U.S. economic recovery is gaining steam heading into the fall," notes The Wall Street Journal. Personal income also increased 0.2 percent in August, "reflecting wage gains and the federal government's distribution of child tax credits."
"Households have the wherewithal to spend," Joe Brusuelas, chief economist at RSM US LLP, told the Journal. "Demand should remain robust over the next two to three years as growth continues well above the long-term trend." He added that supply bottlenecks — like backups at U.S. ports, manufacturing disruptions, or the worldwide chip shortage, "could create some bumps" in the near future.
The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
The rise in personal income was "in line with market expectations," wrote the White House Council of Economic Advisers. "While month-to-month data can be volatile, overall, this report is consistent with a strengthening labor market supporting consumer spending as the post-pandemic expansion continues apace."
Jason Furman, a professor of practice at Harvard University, noted that "restaurant spending is actually fully back to where we would have expected even without a pandemic." He added that the remaining "service shortfalls" are in health, recreation, and transportation, and that the "composition of spending remains very skewed towards goods and away from services."
Consumers also cut their spending on long-lasting goods — like vehicles — in August for the fourth consecutive month, "likely reflecting low inventories and high prices," writes the Journal.
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Brigid Kennedy worked at The Week from 2021 to 2023 as a staff writer, junior editor and then story editor, with an interest in U.S. politics, the economy and the music industry.
-
Critics’ choice: Watering holes for gourmandsFeature An endless selection of Mexican spirits, a Dublin-inspired bar, and an upscale Baltimore pub
-
Argentinian beef is at the center of American farmers’ woesThe Explainer ‘It feels like a slap in the face to rural America,’ said one farmer
-
‘Businesses that lose money and are uncompetitive won’t survive’Instant Opinion Opinion, comment and editorials of the day
-
Warner Bros. explores sale amid Paramount bidsSpeed Read The media giant, home to HBO and DC Studios, has received interest from multiple buying parties
-
Gold tops $4K per ounce, signaling financial uneaseSpeed Read Investors are worried about President Donald Trump’s trade war
-
Electronic Arts to go private in record $55B dealspeed read The video game giant is behind ‘The Sims’ and ‘Madden NFL’
-
New York court tosses Trump's $500M fraud fineSpeed Read A divided appeals court threw out a hefty penalty against President Trump for fraudulently inflating his wealth
-
Trump said to seek government stake in IntelSpeed Read The president and Intel CEO Lip-Bu Tan reportedly discussed the proposal at a recent meeting
-
US to take 15% cut of AI chip sales to ChinaSpeed Read Nvidia and AMD will pay the Trump administration 15% of their revenue from selling artificial intelligence chips to China
-
NFL gets ESPN stake in deal with DisneySpeed Read The deal gives the NFL a 10% stake in Disney's ESPN sports empire and gives ESPN ownership of NFL Network
-
Samsung to make Tesla chips in $16.5B dealSpeed Read Tesla has signed a deal to get its next-generation chips from Samsung
