Even as prices and interest rates are rising rapidly, the ending of the federal stimulus has not watered down spending enthusiasm among consumers. At least not for now.
Tuesday’s latest retail sales data reflects Americans on a speeding spree, ranging from shopping to vacations and fine dining in restaurants. As a result, we saw a monthly 0.9% jump in retail sales, and March retail spending was also revised upwards.
🏘Work your way to the moon🗽
Marvellous, isn’t it? Indeed, it is a sign of a robust US economy strength built on consumer spending. It is also a reflection of a growing labour market, as more Americans are working and taking home paychecks. Moreover, about $2 trillion of excess savings accumulated during the pandemic period is about to be spent by households.
It certainly helps to downplay the fear of an imminent slowdown in the economic engine. Yet, the data is also a double-edged sword, for it supports the aggressive stance of the Fed to tighten monetary policy to slow down aggregate demand in the economy. It means a hawkish Fed for a more extended period.
The dilemma, resilient consumers, a headache for Fed.
More Stories
Consumer Discretionary Stocks Lead Losses, Hinting at Recessionary Concerns
Another record closing for S&P 500 and Nasdaq
A volatile trading session going into the quadruple witching