Don’t Bet Against Consumers With Extra $500 Billion to Spend
Excess savings squirreled away during the pandemic suggest there’s more surprisingly strong economic data to come.
Four bags full.
Photographer: Angus Mordant/Bloomberg via Getty Images
It may be a cliché, but there’s a lot of truth in the saying, “Don’t bet against the US consumer.” The latest evidence came Tuesday when retail sales among a control group that is used to calculate gross domestic product exceeded forecasts for the fourth straight month. This time they rose 0.7% for April as measured by the Commerce Department, topping the 0.4% median estimate of economists.
When it comes to predicting the spending habits of Americans, economists are looking clueless. Despite elevated levels of inflation and interest rates, consumers are hardly cracking as many have predicted. Instead, they are helping to increase the odds that the Federal Reserve can bring the economy in for a mythical “soft landing,” avoiding a deep recession that throws millions out of work and does lasting damage.