Does increased consumer spending mean a positive outlook for our economy lies ahead, or are these figures being manipulated by the government to steer us from the reality that Americans are still facing financial hardships?
Last Thursday, the US Department of Commerce published an increase of 0.9 percent in consumer spending, which was up from April’s reported figure of 0.1 percent. Reports also indicated that May 2015 spending is at an all-time high since August of 2009, leading many to believe that the economy is finally picking up.
However, let’s be candid for just a second. Of course, consumer spending is going to increase in the month of May when you have holidays such as Mother’s Day and Father’s Day consecutively after in June. Despite our financial situations, most of us will go out and purchase nice gifts for our parents. It’s just part of our American culture. We live in a commercialized society and family is a big deal (at least to most people). Our loved ones are celebrated throughout the year with specific holidays. Not to mention, May is also the month in which many graduations take place. Coincidently, it’s also a time when proud parents will generously bestow extraordinary gifts for their accomplished kids.
Sure, you can say we’ve come a ways from the financial crisis of 2008, but these numbers, although increasing, are not an accurate depiction of true economic growth and increased work force. The government is just reporting figures that appeal to readers, but there is no direct correlation to related indexes. So, where are these numbers coming from and who’s to say they’re not tampered with?
The reality is, a large percentage of Americans still can’t afford to save enough money for the future. According to Statistic Brain, 38 percent of Americans have nothing saved for retirement, a whopping 63 percent expect to depend on Social Security, friends, relatives, or charity to financially sustain them in their retirement years and only 4 percent of working Americans say they have enough saved for retirement.
People are spending more, because inflation has taken place, contrary to the 0.0 percent inflation rate reported by the government on June 18, 2015. Americans are paying more for necessities, everyday items and healthcare. Forget the numbers, you can clearly see inflation when you buy just about anything these days.
Unemployment insurance claims along with insured unemployment figures were also reported last Thursday. According to the Department of Labor, for the week ending in June 20, 2015, the figure for seasonally adjusted initial claims was 271,000, an increase of 3,000 from the previous week. Additionally, the advance seasonally adjusted insured unemployment during the week ending June 13 was 2,247,000, or 1.7 percent for the week. The unemployment rate also increased back up to 5.5 percent this past May.
There aren’t enough benefits for all who truly need them. Many Americans are still searching for good jobs and are feeling the strain on their wallets and savings. So, while the government continues to conceal the reality most Americans are currently facing by indicating consumer spending is at a record high, there is still no actual indication of economic growth and improved job market. Many people are still dealing with financial hardship and job loss, while experiencing first-hand the burden of inflation. Additionally, these same Americans are trying to find ways to save for retirement, because Social Security just isn’t enough in this present age.
What are your thoughts? Do you believe Americans are being presented bullish information?