Analysis Of Consumers Put Emphasis On Saving By Jeffrey Sparshott

The article, found in The Wall Street Journal, “Consumers Put Emphasis on Saving” by Jeffrey Sparshott gives us a detailed explanation on how consumer spending can severely affect our economy. Last December, consumer spending was at an all time low since 2009 even though America had encountered a sharp increase in disposable income for the year of 2014. Studies show that more Americans had opted to save their money rather than spend it. Savings rate rose to 4.9% from the 4.3% that previous month. In terms of dollars that is about an additional $75 billion increase in just savings. Despite this outcome, 2014 has overall been a year of increased consumer spending. Consumer spending is important in the United States because it makes up 70% of

They believe that the decline in gas prices will trigger more spending. TD Securities estimated that the decline of gas prices will save an estimated $130 billion for consumers. That is $130 billion that can be spent on buying goods and services. Another reason many economist are feeling particularly optimistic for this year, is due to the idea that 2015 will be a year of falling unemployment rate and increased salaries. As reports have already confirmed this idea, Monday’s reports say that wages and salaries were up .1% from the previous month. This is good news for businesses because an increased personal income accounts for an increased personal spending. As we become more aware of how consumers are spending their money, we get a closer idea as to how successful the business industry will operate as a result. Consumer spending is one of the most important topics when discussing the United States’ economy, therefore the economic environment is extensively influenced by how much people are spending everyday. This uncontrollable factor plays an extensive role in how the world of business is

As we have already discussed previously, consumer spending is a huge influence in an economic environment, however it is not the only influence. An economic environment can also be influenced by interest rates, inflation, unemployment rates, taxes, etc. An economy is deemed uncontrollable because not one person is able to predict it or contain it. Although economist do try to draw some conclusions by studying how individuals, governments, firms and nations choose to use their resources, they will never be able to 100% predict what is to come in the future. The Wall Street Journal article mentioned earlier focuses mainly on consumer spending. Consumer spending is directly linked to a nation’s consumer confidence. The more spending there is the higher the consumer confidence, however if people choose to save more and spend less, this is a direct indication for low consumer confidence. As more people feel less secure about the economy the consumer confidence will plummet. Conversely as people become more secure in the economy their confidence level will