Economic Recovery and Consumer Spending: there’s a correlation. Economic reports from January show slight increases in salaries and wages, as well as increases in personal income. Experts said that these slight increases reflect a “pickup in employment.” Does this mean that consumers will use this extra money for spending? Some reports have shown that many American’s have been using this newfound cash to “pad their savings.” In addition to saving money, rising gas prices have also played a part in the delay of economic growth. As it now stands, the average price of a gallon of gas during the “peak travel season” is expected to be $3.62. There is a 25 percent chance that the average price of a gallon of gas could be over $4. However, gas prices and saving money have not entirely kept people from spending some of their hard-earned cash.
February sales for a number of retailers were reportedly much higher than expected, including well-known names like Target and the Gap chain of stores, which includes Banana Republic and Old Navy. In addition to well-known stores, the automakers of General Motors, Ford, and Chrysler all outpaced their expected sales for the month of February. The increased number of auto sales comes “despite higher gas prices and reduced promotional incentives from many manufacturers.” The recent number cannot be taken as gospel and relied completely to lead the nation’s economy out of the woods, but when you are lost in the woods it is good to hope and a guide.
Information for this article was obtained from http://www.washingtonpost.com/business/economy/americans-earning-more-but-spending-still-in-question/2012/03/01/gIQAtxLXlR_story_1.html.