-More Spending-

Article: Consumer Spending Rose Slightly in August

Author: THE ASSOCIATED PRESS

Date of article: September 27, 2013

News Source: USA Today

                This article explains the rise of consumer spending from the month of July through August as due to a rise in income and economic growth. As of July, consumer spending on goods and services rose from 0.2% to 0.3%. Now this might not seem like a huge jump, or even a jump worth discussing, but it is. This small increase in percentage shows that the economy is growing, slowly but surely. This is proof that people are getting back on their feet, that families are able to spend more and people are coming up with higher income. Nothing shows health in an economy than a rise in consumer spending.

                The article continues to praise consumer spending saying “Consumer spending drives 70% of economic activity. Many analysts say the increases are not enough to accelerate economic growth in the third quarter from the 2.5% annual rate in the April-June quarter. Still, the pickup in August spending could signal stronger growth in the final three months of the year.” Although the rise is not that significant, it shows that our economy is headed in the right direction. It goes on to say “There are some signs that consumers may be better positioned to step up spending soon. The number of people seeking unemployment benefits has sunk to its lowest point in six years because few companies are laying anyone off anymore. That has led some economists to predict that employers added 200,000 jobs or more jobs in September, the most since February.”

By looking at the consumer spending, one can figure out the state of the economy and even the state of the country. Think about it, if consumer spending is low, that mean people are not buying things, the economy is rough, and people are not buying what they want or perhaps what they need. This could be due to a high unemployment rate, a low standard of living or a shrinking economy that cannot support its people. The most likely cause for this rise though, would probably be the Back-to-school purchases by families as students get ready for school. Either way, higher consumer spending is a very good thin so when examining these numbers, economists see nothing but good news.