It is that time of the year again. The Christmas season brings along with it lengthy shopping lists, long lines, and a direct gaze towards the US economy. Academics around the nation use this season and the long shopping lines as a way to gauge the US economic outlook for 2014. Are the shoppers confident in spending their money on shopping gifts or are they reserved? This year’s full shopping carts suggest US citizens are ready to take out their wallets and purses to spend big.
Experts have been keeping an eye on the shopping spree going on at major retailers and feel customers are truly breaking records. The recession was a tough time for one and all, it required a lot of individuals to go into “savings” mode.
Since, the time of the recession in the nation, this is the first time where customers have shown a lot of confidence in the economy.
Academics are suggesting this tremendous spending of money at the major retailers has broken a five year old record. This is one of the strongest months of not only this year, but since the nation went through a tough recession.
What about the future? Will these trends just cease after the holiday season fades away? Experts feel this will not be the case as signs are definitely pointing towards an up swing.
For most, this is just a sign of things to come in terms of the positives. The US economy is certainly heading towards a brighter future. While, the “last minute” shopping sprees have been frustrating, the results should still ascend. Spending is expected to continue increasing into the next quarter ahead of its regularly anticipated pace of 2%.
One of the first signs to focus on when trying to gauge the quality of the US economy is to gaze towards the income figures. How is the population doing in terms of what it is earning? Is there growth in that part of the economy? If the population is earning more as a whole, there will be more expenditures.
Income growth has been listed at being around 0.2% increase, which is nothing of great significance. Yet, this does show growth and that is something to pinpoint for economists around the nation. It helps show ascent, which can be a sign of things to come for the economy in the upcoming months and years.
Economists have been trying to understand how consumers are spending and catalysing such a change in the economy without their income growing. This is a quandary that has perplexed them, but there are theories out there by some.
One of the theories by those who are more “pessimistic” with their views comes in the form of consumers using their savings to spend. More consumers are willing to dip their hands into those savings accounts to purchase gifts.
The IMF will be looking to release a report to gauge how the economies around the world are doing. This is often a wonderful time for the nation to assess how it is growing with a neutral point of view. This report is done by taking in a range of factors to adjudicate the health of a nation’s economy.
The IMF is expected to state the US has a growing economy that has slowly left behind the worst of the recession that befell it a few years ago. The US economy is said to be growing, but at a slow rate.
Why is it growing at such a slow rate? It has to do with the inflation rate and how it is doing. The inflation rate has not gone up and this has led to the growth to taper off and remain continuous but slow.
In the end, the economy will only grow if consumers continue to trust the strength of the dollar as a whole. If they are able to see a constant wage growth, they will be able to trust their ability to spend.
The US economy does appear to be heading towards this status, but it will take a little while. The growth spurt will take its time, but consumers should expect to retain their confidence as the holiday season ends and the nation heads into the next quarter.
Savings figures have started to dip down as more individuals are ready to spend. This paired with the growing wage and income rates suggests the nation is heading towards brighter days. When the savings figures start to dip down, this is often a great sign for things to come.
The government has also stated to trim down its bond purchases that have been used to prop up the economy. This has been done after the economy has shown excellent growth and will continue to do so.
Merry Christmas and God Bless!