We all know how much consumer demand has fluctuated since 2019. Whether it was an increase in d U.S. consumers are continuing to spend in 2023, mostly on
The Commerce Department reports that U.S. retail sales have increased in stores and online by 0.3 percent.
Besides gasoline, majority of all other retail categories saw increases including furniture, electronics, building materials, sporting goods, restaurants, etc.
Additionally, in-person services seem to be the most optimistic category this year, with hotels and restaurants seeing the biggest increase compared to levels back in 2020.
U.S. Consumer Confidence Increases
In the month of July, the consumer confidence index increased to 117 this month, which is the highest reading since July 2021, from 110.1 in June, per Reuters.
While the confidence improvement was throughout all age groups, the largest increase was from consumers 35 years old and younger.
“Greater confidence was evident across all age groups, and among both consumers earning incomes less than $50,000 and those making more than $100,000,” Dana Peterson, Chief Economist at The Conference Board stated.
There is a caveat though, as some consumers reported in a survey conducted by The Conference Board, that they are concerned about a possible recession over the next year.
In the report, consumers detailed their intentions to spend less on elective services including travel, recreation, etc. However, the report showed that consumers anticipate they will spend more on healthcare and streaming services.
What does the outlook for the second half of the year look like?
Some economists, including Seth Carpenter, Morgan Stanley’s Chief Global Economist, think we will see “more normal patterns that were completely distorted during COVID, that’s mostly played itself out.”
Carpenter, in an interview with Yahoo Finance, continued saying, “we just look for general slowing and overall consumer growth over the second half of the year as we look for continued easing in the pace of job gains, so it’s really going to begetting back to fundamentals, getting back to a labor income-driven spending outlook,” he anticipates that’s going to continue to cool for the rest of this year.
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