Consumer Spending Increases Despite Continued High Levels Of Unemployment But Areas Of Spending Lead To Concerns

10/31/2011
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We have seen reports that indicate consumer spending rose in September, despite the fact that we have seen continued levels of high unemployment and some rumblings that there are consumers having trouble repaying certain types of loan and credit card debts, which has led to a question over whether consumers are spending wisely or if the increase in spending may simply be the result of higher costs in certain sectors of the economy. Yet, when it comes to spending in areas like retail, as an example, there are indications that men and women may be taking advantage of holiday sales this year, but there are concerns that consumer confidence in not only the economy but within the personal lives of these men and women could factor into spending in the coming months as well.

There are those who are employed at the present time and potentially in a position to spend, but these men and women may be in a position where some are not confident about their employment or stability of their job in the future. Yet, there are some indications that certain retail stores are planning to hire more workers this holiday season, despite the fact that there are some concerns that consumers may not spend as much this year due to, once again, high levels of unemployment and uncertainty about their job. Many mixed ideas of what the coming months may bring in terms of consumer spending are also being factored into forecasts over whether we are seeing improvements in terms of economic growth, and if so, if these are improvements are at a slow rate.

Understandably though, there are many concerns that still surround the ability of consumers to spend and whether certain consumers should be spending at the present time, as there are those who have relied on certain types of credit, specifically credit cards, to make purchases that may be beyond their means to repay. Obviously, if a consumer is using a credit card to buy necessities, this will likely indicate that they are in a position where their funds may be tight at the present time or they could be running out of options when it comes to meeting the costs for certain necessities and delinquency or default may be on the horizon.

While problems such as high fuel prices, food prices, and other issues like a difficult job market may make the financial situation of certain consumers such that they cannot spend as they would like to, there is some questions as to why consumers did spend more in September, despite these negative aspects of the economy, and as a result questions still remain as to whether the holiday season will bring good news for retailers, despite the fact that there are still problems with consumer income and joblessness as well. There are those who hope that the holiday season will point to not only strong consumer spending numbers but an ability that many have to afford spending in such a way, but again many feel that we have a long way to go when it comes to the full recovery and return to a strong position in terms of consumer strength.

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