Student Blog: Thoughts On The Law And The Legal Field
ARE AMERICAN CONSUMERS SPENDING BORROWED MONEY?
American consumers have finally come out of hiding. New figures suggest that consumers are no longer restricting their budgets to necessities. Consumers have started to buy clothes, jewelry, and every cars again. After the financial crisis hit in 2008, consumers stopped spending heavily on anything but necessities. However, it seems as though the mood has gone from cautious to almost "a bit giddy" as Mark Zandi, chief economist for Moody's Economy.com put it.
Consumers have now eased off on their savings, freeing up cash for them to spend. Major retailing chains have posted higher earning than expected. Industry sales are expected to increase up to 10 percent compared to a year ago. Businesses are booming again thereby increasing spending. Employers have also added almost 162,000 jobs last month.
However, there is fear that the sale gains could be temporary. If the money consumers are spending is borrowed money, the economy could be in worse shape.
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