After more than a year at home and with lots of money in their pockets, Americans are ready to spend. According to data from the Bureau of Economic Analysis, spending is up for all consumer goods, and for food at home in particular--which is still rising even months into the re-opening. Perhaps Americans learned to cook this past year and want to keep doing it. They are also buying cars, other recreational vehicles, and fixing up their homes.
Before the pandemic, Americans spent more on services instead of goods. And they still do, but service spending cratered in 2020 and still has not fully recovered, with the exception of heatlh care and household services.
So far, it seems, the pandemic may have changed spending patterns. The economy is coming alive again, but Americans are shifting their spending to things instead of experiences.
Allison Schrager is a senior fellow at the Manhattan Institute. Follow her on Twitter here.
Interested in real economic insights? Want to stay ahead of the competition? Every Wednesday, e21 delivers a short email that includes e21 exclusive commentary and the latest market news and updates from around the Web. Sign up for the e21 Weekly eBrief.
Photo by Raul Mellado/iStock