Voila! We are making progress. Follow the hyperlink for a short but informative article in the WP:
For last quarter overall, consumer spending did grow at a 3 percent annual rate. But that gain was dominated by a 4.4 percent rise in spending on services, reflecting in part higher utility bills during the unusually cold winter.
Economists say warmer weather likely encouraged people to make purchases last month that they had delayed because of snowstorms earlier this year.
“The weather-related rebound may now have run its course,” said Paul Dales, senior U.S. economist at Capital Economics.
To what extent is this a temporary hike? What are the chances of consumer spending plunging now that it is spring?
It is interesting how weather is related to economics but I guess it makes sense given the long harsh winter that have discouraged people from going out. Spending does come from the majority 99% of the population in this case :)
ReplyDeleteBut isnt it true that spending picks up at the beginning of each season as people buy clothing and items that match with the need of that season?
I agree it is interesting how such a harsh winter can take a measurable toll on the economy. The numbers were released for Q1, and apparently the US economy only grew by 0.1% overall.
ReplyDeleteHopefully the rest of the year will be better, in part led by consumer spending. Perhaps spending will come down slightly as people adjust to the weather and are not responding to the harsh winter (i.e. buying now what they put off for an extra few months). As we saw in the documentary last class, consumer spending and the middle class contribute significantly to the middle class.
It's not that surprising about the increase. Spending is also heavily done when there are changes in the weather. Especially this winter, it was below freezing most days.
ReplyDeleteI would be interested to see if this trend continues indefinitely.
Can the same thing happen in the summer season? I would think no, therefore I would say consumer spending might decrease slightly during the summer season and pick up again once winter is back. However, if the summer becomes really intense, we might see another increase in utility bills because of the use of air conditioner units
ReplyDeleteIt's interesting how people behave differently with the seasonal changes. Some species have a "mating season" and hibernation period, etc. We don't necessarily have these seasonal phases, but we do behave differently depending on the season and geographic location. The economic implications of this vary.
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ReplyDeleteI'm not really sure if weather really can significantly effect the economy, but I've actually seen a decent amount of prominent economists argue that the weather has indeed influenced the economy over the past couple of months. Also, increases in consumer spending is a positive sign for the economy, for they are the backbone of the economy, as we saw in Robert Reich's movie.
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