On today’s Business Beat, Jeff discusses the rise in consumer spending, with a reported 1% increase in personal spending in June, according to the Bureau of Economic Analysis.
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Good morning, Paul!
People are spending, and for those of us who own businesses, that is certainly good news. U.S. consumers have upped their spending in June. The Bureau of Economic Analysis reports that personal spending increased about 1% in June — a welcome surprise after the slight decline in spending seen in May. As summer started and restrictions on businesses loosened, consumers spent about 1.2% more on services in June than in May and about a half a percent more in June versus may on goods.
June’s numbers reflect a continued shift, economists said, from buying things to enjoying experiences. The preference for activities like dining out, recreation and travel has powered the U.S. economy to rapid growth. The rise in wages, meanwhile, reflects a position of strength currently enjoyed by workers as businesses attempt to attract much-needed staff, and they’re doing that in many cases by offering fatter paychecks and other perks.
Significantly, the overall jump in spending came, despite the fading effect of government relief programs as fewer people collected unemployment benefits and stimulus checks. Now, one cautionary note, one thing that could derail the optimism and the economy, is inflation.
The Federal Reserve’s measure of inflation slightly accelerated last month, rising to 3.5 percent year over year in June, the largest increase since 1991. So, Paul, as long as inflation settles down, and as long as this Delta variant doesn’t throw a monkey wrench into the equation, we could actually be in for a nice little run for our economy going forward, and that’s welcome news for small business owners.
Our advice: carpe diem. Get it now while the spending’s hot.
I’m Jeff Sloan, founder and CEO of StartupNation.com, and that’s today’s Business Beat on the Great Voice of the Great Lakes, WJR.