Sunday, October 31, 2010
Consumer Spending Up, but Can Fast Growth Last?
In this article it talks about how economic output grew 2 percent in the third quarter largely due to consumer spending. This can be looked at as rather good news that consumers are feeling more confident in the market. It was the fastest consumption growth rate since the 4th quarter of 2006. However with Americans having trouble finding jobs; this growth is likely to be short since consumption depends on people's income. Job growth has been weak to nonexistent in the past few months and consumers are still buried in debt. Do you think this fast growth in consumption will continue or will we be likely to see it decrease over the next quarter?
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I think we will likely see continual increases in consumption in the next quarter. Though the article is optimistic about job growth, I think that increases in consumption will send a clear message to firms that the economy is picking up. With that said, I think that firms will start expanding, increasing job opportunities. Although the process is slow, I think this is a signal for good things to come for our economy.
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