The Consumer’s Role in Economic Strength: Analyzing Income, Jobs, and Spending

The economy constantly fluctuates, bringing excitement and anxiety to businesses and consumers alike. But amidst all the ups and downs lies a constant force that drives the economy – the consumer.

We’ll be diving into sales, income, spending, and employment to give you a deeper understanding of how consumers impact the economy.

The bottom line

Let’s take a look at sales first. Real merchant wholesalers peaked in March 2022 but then declined by 7.5 percent. However, the decline has slowed down.

Despite this, real retail sales spiked in March 2021 with fiscal stimulus and have trended downwards.

Nevertheless, consumer spending remains very high compared to the pre-pandemic months.

Why it matters

Income and spending are two critical measures for understanding consumer behavior.

Real personal income, ex. Transfers have experienced slow and steady growth over the last 12 months at a one percent annual rate. Real personal consumption has been steadily trending upward since the end of the pandemic at a slow pace.

The spending habits of consumers during this time can tell us a lot about their confidence in the economy and the impact of government stimulus on consumer behavior.

Looking underneath the hood

Employment is the final factor that we’ll be analyzing. The household survey reveals a blowout in the year’s first quarter, averaging 549,300 jobs per month.

However, in the second quarter, monthly readings turned negative or slowed, with an average of only 39,000 jobs per month.

The payroll survey showed big numbers in the first quarter, with 312,300 new jobs per month. The second quarter is slower but still quite strong, with 244,000 jobs per month.

These numbers suggest that while the job market may fluctuate, it is still alive.

Overall, the economy shows signs of recovery after the devastating pandemic. The consumer has played a significant role in keeping the economy afloat with high spending levels despite slow income growth.

With the job market still alive and consumer confidence rising, businesses will likely increase their real estate demands. As a result, there is a growing need for commercial real estate brokers to facilitate these transactions and ensure smooth negotiations.

Source: Robert W. Gilmer, Ph.D. C.T. Bauer College of Business, June 2023
“Consumer Strength Meets Fed Policy: Is There Really a Recession Ahead?”


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