the economic recovery
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 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.