Americans don’t buy as much as they used to, although U.S economy has registered a timid growth for the past two years. The workforce market slowly gets back on its feet and industries start slowly evolving back to profitland. This being said, the economy has still lost its momentum and grows at a timid pace, reports say.
American people started discovering what a frugal lifestyle means, although the US economy gets back on its feet. Oil prices have fallen to the benefit of common consumers but on the other side of the story the cold winter weather kept shoppers at home and exports were slowed due to a labor dispute at West Coast.
The second half of the year is expected to bring better news among Americans who hope the economic system could regain a fast growing pace.
Cut-backs have been lowered and employers are trying to hold on to their existing workers. A good sign of industry growth is also the increasing number of jobs. Applications for unemployment benefits are also at a very low level, the lowest in 15 years which makes job security stay high. In April only, employers have added 223.000 jobs, with the unemployment rate falling to 5.4%
Still, economy is waited to expand at an annual rate of only 2% in the April-June after a very shy growth of 0.2% in January-March.
Unfortunately, previsions are not optimistic for the near future, with economists reporting that the government’s revision to come will send the figures into negative territory.
Although the workforce market is getting back on its feet and oil prices are decreasing, the American people hold tight to their economies and avoid large investments. The recession period which lasted for quite some years has made people have fear for the future and concentrate on making the most with limited resources.
On a larger scale, a 3% growth was expected in the first half of the year but only 0.5% in growth were reported. That is very far from what economists estimated, which sounds like they have a pretty much unrealistic view on what is happening with the American people. The purchase power is on a continuous downfall, in spite of the prices decrease, resulting in people more concentrated on retention than on spending carelessly.
Only in the first three months of the year Americans were eager to make new purchases, they increased their spending with 1.9%. April was the driest month for businesses, with consumers not caring at all about new ways of spending money. Still, economy is expected to raise to a 2% in growth until June.
Specialists report that the US citizens are very skeptical when it comes to prices decreasing, they only believe it’s a temporary measure and stick to other investment alternatives that maybe are not so productive for the American economy. Also, their resources are concentrated on value rather than volume, reason why the lust for new purchases has diminished among the population for the last years.
As a conclusion, economists believe that a raise in people’s incomes will activate their will to buy and invest again in more valuable belongings that are set to raise the numbers at an economic level.
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