As the economy continues to sputter along, consumer spending is near a four-year high, according to Gallup.
Americans reported spending an average of $77 a day, up from $73 in July. Consumer confidence, however, dropped between July and August, from 65.4 in July to 60.6 in August.
This trend comes on the heels of the Bureau of Labor Statistic jobs report that showed only 96,000 jobs added last month, with an 8.1 percent unemployment rate. August marked the largest number of workers “not in the civilian labor force” on record, with some 88 million having dropped out.
“This is definitely a setback for the labor market and the economy,” Michael Feroli, chief U.S. economist at JPMorgan Chase and former economist for the Fed, said to Bloomberg News.
“Job market improvement could encourage this group to start spending more, but it will take a lot to get them to spend anywhere near what they did in early 2008, before the financial crisis,” Gallup writes.
IBISWorld market research group suggests that consumer spending may soon explode, despite the still lagging economy.
“Nearly five years after the recession began, consumers are tired of cooking at home, residing in cheaper and older homes and driving leased vehicles,” writes the L.A. Times.
IBISWorld expects that big ticket items that struggling consumers were holding out buying, things like homes and cars, to rebound back, pointing to increased home prices and a moderately recovering auto industry. The group also suggests that the restaurant industry will pick up as well.
Still, the economy faces an uncertain federal fiscal situation heading into 2013.
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