Recently the Wall Street Journal reported that the “U.S. economy is bouncing back from a lackluster start to the year, driven by a resurgence in consumer spending.” Household spending accounts for more than two-thirds of economic output in the U.S. and has been a mainstay of the expansion for more than five years. But consumers pulled back in the opening months of the year. The slow start in spending was also felt here in Tallahassee.
Our Dashboard shows that through March spending was positive, but slow. However spending ramped up in April. This is following a national trend. Personal spending, which measures how much Americans paid for everything from autos to airfare, increased 1.1% in April.
The bar chart below compares the first four months of spending trends in Leon County since 2012. The chart shows the steady increase from 2012 through 2014 and then the significant decrease in 2015. The local economy rebounded from the lag in spending at the beginning of 2015, but could only match spending in 2014. For this year, while not at the 2014 pace, spending continues to stay ahead of the pace set in 2012,2013 and 2015.
The table below shows seven of the major contributors to growth in Leon County spending during the first four months of this year as compared to 2015.
The group was lead by the Consumer Electronics and Computer category with a 21.6% increase in spending over the same period last year. Next in line were Home Furnishings and Automotive Dealers coming in at 11.2% and 10.3%, respectively.
Spending on Hotel/Motel Accommodations, Restaurants, and Building Materials rounded out the top six.
One troubling trend to watch closely over the coming months is the impact the downward pressure on employment will have on consumer spending. Local employment has decreased over the last two months after increasing at the beginning of the year. However, national experts predict that modest increases in wages, higher saving rates and low inflation will keep consumers spending in the coming months.