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Consumer spending on rise

By Nick Mutschler

On April 5, 2011

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Consumer spending has been on the rise for the past year, according to the U.S. Bureau of Labor Statistics (BLS).

February showed further increases which were higher than projected by U.S. economists. Hikes in employment, consumer confidence and increased gas prices all play a role in this.

Payroll employment increased by 192,000 in February, according to a March 4 report by the BLS. The U.S. also added jobs for the sixth consecutive month in February while the unemployment rate fell to its lowest level since April 2009, according to the Commerce Dept.

One of the largest contributors to the economy is from household purchases, which make up almost 70 percent of the economy. They rose 0.2 percent in January then another 0.5 percent in February, according to a median estimate by Bloomberg News economists. In February, Retail sales also raised by the most we have seen in four months, with a jump in auto purchases.

"I've definitely spent more during these past few months, partially because of the hype we've been hearing that the economy is improving, even if it's only slightly," said 43-year-old Prince George's County resident David Burns.

Another reason for this increased spending is because Americans seem to be more enthusiastic about finding jobs, thus being more willing to spend. Discouraged workers, which are those who have not looked for a job because they believe none are available to them, dropped 184,000, or 15.5 percent compared to last year, according the BLS.

The rising price of gas certainly played a part in this raised spending as well. Gas prices aren't likely to go down anytime soon either. Gas prices climbed more than 2 percent this past week after President Barack Obama said he wanted the U.S. to rely less on foreign oil according to a report by the Associated Press.

"I'm still keeping a very tight budget, but that doesn't mean my spending isn't increasing. Even while everything is staying relatively the same with my home and food purchases, gas prices are kicking my butt. There's no way around it either," said senior business major, Mei Wu.