Consumer spending accounts for 70 percent of the U.S. economy. Are consumers doing their part to help the economy by spending? N.C. State University economist Mike Walden responds.
“Up until last fall, we really weren’t. And that caused a lot of worry for economists. But beginning with Christmas, and of course we adjust for the typical Christmas effect, but beginning with Christmas and so far through this year, consumers have really been doing their part. In fact, consumer spending is now back to pre-recessionary levels. And I think this is one reason why economists certainly are a little more optimistic about the economy, even though of course we still have an unemployment problem.
“If you look at where we’ve seen major increases in consumer buying, at the top of the list is buying on cars, vehicles. In fact that has been up 24 percent over the last year.
“Building supplies are also up. Now some of that is going right to the consumer in terms of doing their own remodeling, but building supplies sales are up 11 percent over the last year.
“Of course gasoline — that is simply because the price is higher, up 14 percent.
“And it appears we are having a little more fun. Spending on recreational outlets is up a full 5 percent over the last 12 months.”