American consumers are spending more, as wages rise

United States consumers shrugged off tax increases in February, as they earned and spent more, in another sign of the world's largest economy is on the road to recovery.

The U.S. Commerce Department reported Friday that consumer spending rose 0.7pc in February from January. It was the biggest gain in five months and followed a revised 0.4pc growth in January, which was double the original estimate.

The steady pace of sustained economic growth starts to increase wages, which should help to provide some cushion for households with higher taxes and support economic growth.

Category: Finance Viewing 1757 | Added in June 11, 2013

13 Responses

  1. avatar tonydartford Says:
    June 11, 2013

    Wait until Obama finds out they have more money, taxes will rise.

  2. avatar jjforest Says:
    June 11, 2013

    Im doing the same sort of job in the USA I was doing in the UK before moving over to the USA in December.

    The wages are better here and the cost of living is lower, but instead of spending the money out in the economy Im putting most of it to retirement accounts to avoid tax so thats probably not helping the economy.

  3. avatar patrickz Says:
    June 11, 2013

    According to the University of Michigan’s College of Perennial Optimism, America’s consumer confidence has risen and then fallen back for the 27th time since the start of the 2008 recession. Consumers are spending more since gas prices at the pump have returned to record high levels and sales taxes have gone up across the board from the humblest hamlet to the state level. We’re on the verge of energy independence here in America and consumers should see across the board decreases in energy costs any decade now. 

    Government is our only true growth industry but Wall St. won’t sell us consumers equity interests in our federal government. Postage will soon increase to $3 for a first class stamp and mail delivery restricted to Wednesdays only. Washington D. C. area residents enjoy the highest levels of consumer confidence ever recorded, there is no shortage of jobs in that American city and our government economists are admittedly stumped as to the specific reason why. And our own confidence is high that Washington D. C. area consumers will continue to frantically consume – as for the rest of us, who can say?

  4. avatar deeptruths Says:
    June 11, 2013

    Obviously you know nothing about America.  Postage is still under 50 cents, they should raise it to a dollar, but they are not smart enough.  Our post office is a lot like your leaders -- slow on the uptake. Quite frankly you only really need three days of mail and Saturday for package deliveries.  USPS finally realize that they have enough trucks to deliver Amazon and whomever products, and actually compete with FED EX and UPS.

    Government has NOT been the engine of growth. In fact 200,000 federal and state workers have been furloughed or lost their jobs. Had the government been the former engine that it use to, i.e. buying defense related products - the downturn here would certainly have not been as great as it was.

    Face it Brits, the decline of the British empire is the only thing picking up speed.

  5. avatar gandalfgeo Says:
    June 11, 2013

    You'll find that the bulk of people with the sizeable pay packets and pay increases will be Government employees and not from the private sector. "B52 Ben" has a licence to create digital money to infinity without any fear, for the moment, that nations with large T Bond holdings will sell this effectively worthless paper and dump it on the market to crash the dollar. Fortunately, for the Fed, everyone else is engaged in a competetive devaluation of currency leaving the United States $ effective "King in Hell". 

    So, those lacking any depth of market perception the QE bandwaggin rolls merrily onwards. However, don't expect this happy little situation to last forever. In fact it may get tested very soon and that would be a bolt from the blue for many!

  6. avatar deeptruths Says:
    June 11, 2013

    While we here in the USA are getting our act together, it is a fear that you over in the EU and UK have effectively had your head in the sand.  Singing "la, la, la, I can't hear you" when the US is trying to tell you that austerity wouldn't work.

    My hope is that when the EU comes looking for a hand-out, we too will pretend not to hear.

  7. avatar unit472 Says:
    June 11, 2013

    Pretty impressive our government data geeks can tell us within a tenth of a percent how much money we made last month. Of course their other data sets that forecast how all their data is going to affect GDP can be off by as much as 100%!

    May as well listen to a boy tell you how big the fish he 'almost' caught was.

  8. avatar gandalfgeo Says:
    June 11, 2013

    Well put. Its a case of damn lies and statistics. The first casualty of the number manipulators is the truth and statistics are the first target for chicanery and obfuscation by the political classes.

  9. avatar gandalfgeo Says:
    June 11, 2013

    48 million people in the US are on food stamps; real wages have fallen for the last 6 years in real terms; and Real unemployment, including those who no longer register as unemployed as they have basically given up looking for jobs is north of 15%. 

    The top 1% of Americans own more than 45% of the economy.

    Most new jobs comprise low paying unskilled or semi skilled occupations such as Wal Mart shelf stackers and check out staff, or in the fast food chains such as Mackers, Burger King etc. Find how many skilled new positions there are in manufacturing, engineering and design work and you'll find the figure is negative. This article is the work of a hack paid to enhance the "feel good " factor to cheer up the aveage Joe who sucks in this garbage.

  10. avatar D C Says:
    June 11, 2013

    Sure, you enjoy that recession you guys are cooking up over in the UK... hehehe... how many is that now? 3 recessions in 5 years, ouch!

  11. avatar deeptruths Says:
    June 11, 2013

    Ha, ha.  It's true.

    Talk about numbers, Europe and the UK do these 0.2s and 0.4s.  The 0.4 is suppose to represent amazing growth.

    In America, Q4 was suggested at minus 0.1, revised to 0.4.  We were perking along at 3.0 percent.  That is the nature of the winter, spring, summer economic figures.  They average out in the end.

    In 2012, US = 2.2% growth GDP.  UK = 0.5%.

  12. avatar jjforest Says:
    June 11, 2013

    You make it sound like there aren't high paid skilled jobs out there, and that just is not the case.

    For people like me, my family, my friends, there are loads of good paying jobs and the cost of living is quite low compared to the UK. I lived in the UK six years but came back because the job opportunities are much higher quality back here in the USA and the standard of living is better.

    Of course things can always improve but its certainly nothing like you describe it. Im glad to have escaped the tiny little attached homes squashed up alongside the road that are all that middle-class can afford with no room to drive a car in the UK and I'm happy to be able to afford a larger home, take more holidays, and not have to wash my clothesin a tiny front-loading washer/dryer in my kitchen anymore.

    Its not all bad dude.

  13. avatar Pheasant_Plucker Says:
    June 11, 2013

    The US economy should be moving as we are flooding it with borrowed money to the tune of US$Tns. It is good that finally all this funny money is moving the needle. However its current level of borrowing is unsustainable, there are huge financial liabilities coming due in 5-10 years and a mountain of toxic debt assets now owned by the tax payer.

    Yes enjoy it for now but just like a credit card at some point you have to pay the price and then the economy will suck for 5-10 years.

    That said I am an optimist and the US will get through it albeit at the expense of working class. The workforce is extremely dynamic as you demonstrate in your moving around for work.

    Keep in mind that health care insurance in US goes up significantly more than inflation each year so your wallet will get lighter. Also gas is not as cheap as it used to be. If you don't need to drive or health care then it feels good at the moment.

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