Americans Are Regaining Consumer Confidence — Here’s What They’re Buying
Several markers are pointing to economic recovery in the United States, including impulse spending on the rise, a healthy job market, and Moody’s Analytics and CNN Business’ Back-to-Normal Index reporting that the economy is operating at 89% of pre-pandemic levels. Plus, a new survey by Charles Schwab showed that 47% of people polled are ready to return to their spending habits from before the pandemic, which includes splurging on travel, entertainment and even parties, MarketWatch reported.
The Schwab 2021 Modern Wealth Survey showed that Americans are planning to spend money in the following areas:
- Traveling (40%)
- Socializing (30%)
- Extended Vacations (24%)
- Dining out at an upscale restaurant (21%)
- Throwing a party (15%)
More Americans Get Back to Pre-pandemic Activities
Similarly, the Axios-Ipsos Coronavirus Index revealed that 54% of Americans reported going out to eat within the past week. MarketWatch said it’s the first time in over a year that more than half of those surveyed said they ate out.
The index also revealed that close to 60% visited relatives or friends in the past week, another one-year high.
Spending Rises and Credit Card Debt Falls
U.S. Census data showed at 726.8% rise in clothing and accessory sales in April 2021. As dressing rooms began to open back up, Americans went shopping for clothes to support a return to the office place or social events with family and friends.
At the same time, credit card balances continued to drop in the first quarter, MarketWatch reported.
There was a decline in credit-card balances in the first quarter of 2021. “However, surging retail sales volumes suggest that a combination of stimulus checks, increased consumer confidence and pent-up demand are both supporting consumption and also helping borrowers reduce revolving debt balances,” Andrew Haughwout, senior vice president at the Federal Reserve Bank of New York, told MarketWatch.
However, rising inflation could put a damper on spending dreams, MarketWatch reports. The inflation rate reached 4.2% in April, up from 2.6% in March, however, those numbers were largely driven by used car and truck prices, which rose due to increased demand and a lack of supply.
More From GOBankingRates