Spending down despite great economic numbers
COLUMBIA - A good jobs report and a increase in wages usually means a booming economy; however, one thing is missing, consumer spending.
This is the third straight month consumer spending dropped in the United States, and the news came as a surprise to economists. Normally with a strong jobs climate, an increase in wages correlates with an increase in spending. Economists are blaming the unexpected fall in sales on the weather. Some economists said the extremely cold winter caused people to stay inside and save instead of go on a spending spree.
The month drop in sales is the first time this has happened since 2012. Economists originally projected a retail sales increase of .3 percent. However this is the first time this millennium where the economy has seen positive job and wage growth, while seeing a drop in retail.
Not all industries have felt the pain. Columbia Appliances said spending is up, especially compared to last year.
According to Peter Mueser, an economic professor at MU, the lackluster sales numbers could be a result of the 2008 recession. Mueser said a couple positive reports have not restored faith in the economy for a lot of people. According to Mueser, wages have not increased enough in recent months for there to be a large increase in discretionary income. This combined with a distrust in the stability of the economy led to another drop in spending.
It's not like the money is disappearing. According to different reports people are saving more money than they have in the past. Even with lower gas prices, it seems people are putting that money into savings, rather than spending.
According to the report, retail sales have been the hardest hit.