Government figures show that there is a surge in consumer spending last March 2019, reaching an index of 0.9 per cent in the first quarter of the year.
For over a decade, this reported increase in figure is the largest monthly gain. It follows a notion that since Americans are spending too much, the economy is good.
Inflation, on the other hand, is steady and flat, which signals America’s economy holding up.
Meanwhile, personal incomes have also increased by 0.1 per cent in March, according to the report of the US Department of Commerce.
“Spending was way up, which is a continuing trend for the first quarter. It seems that consumers are completely comfortable with increasing their spending through 2019, despite the rough end of 2018,” said Harris Financial Group Managing partner Jamie Cox.
In an article published by NBC News, it is stated that economists are anxious about the fact that the end of 2018 may affect consumer spending in the first quarter of 2019. Given this reported data, experts are already relieved with continuous consumer activity.
Slow moving economy and near-full employment
Given that the GDP is still muted and no massive changes, some economists are left puzzled. There’s a conclusion that retiring Baby Boomers can add to this effect plus mismatch skills in employees that companies hire.
To simplify, this means that high-compensated employees are already leaving different companies and they are being replaced by slightly younger employees with above minimal salaries.
Meanwhile, on the issue of mismatch skills, Sameer Samana, Wells Fargo Senior Global Market Strategist said, “Employers can’t find the people with the right skills, so they have to hire at unskilled wages and train them.”
Overall, the market reaction is a good indication that the economy of the United States is in a good position. The employment rate is also stable and inflation is controlled.