Will the consumer spend again?

AlphaOverBeta

Newbie
4 0
Consumer spending contributes almost 70% of the total United States production. In 2019, that was $13.28 trillion.
In order to show growth, the consumer needs to start spending again, these are the categories of U.S. consumer spending, ranked from largest to smallest:
housing, transportation, food & beverages, and medical care.
For the US economy to show positive improvement the consumer has to:
1. Buy a new house - unlikely any time soon, this is by far the largest expenditure of any US household and will probably be put on hold in the next quarters.
2. Buy a new car, commute more often - unlikely to happens soon, unless car manufacturers find a way to reduce prices significantly
3. Buy more food & beverages - there will always be a steady demand for that so no big change up or down in the future.
4. Medical Care - now here is a category which I believe will see an increase, the coronavirus health shock will make the consumer take a second look at health issues and decide to increase spending on personal health.
So in total, there will be a significant drop in DGP in 2020, or, in the better case, the GDP will stay put,
Trade Smartly,
Alon
 

Sharim

Member
67 5
The coronavirus pandemic led to a 29% suspension of economic activity in the USA.
Although the real extent of the impact of the pandemic on the economy can't be estimated in the next few years, economists have noted an unprecedented suspension of trade due to measures taken by the authorities.
41 U.S. states have decided to temporarily suspend businesses that aren't classified as crucial. At the same time, restrictive measures have affected the most populated regions, which contribute disproportionately to the country's economy. Districts in which exclusionary measures have been imposed account for 80%, but they account for 96% of production.
A study by the Economic Innovation Group, found that the slowdown in New York, New Jersey and Connecticut was mainly due to two sectors - real estate and retail. In some sectors, including the restaurant business, incomes dropped by three quarters.
Suspension of production may eventually have an impact on demand. More than 10 million Americans have applied for unemployment benefits in the two weeks that ended March 28. The number of jobs in the country's economy shrank in March for the first time since 2010 - by 710 thousand people, the Ministry of Labor said. Unemployment in the country jumped to 4.4% from 3.5% in February.
 

ConfusedInvestor

Junior member
30 3
Consumer spending contributes almost 70% of the total United States production. In 2019, that was $13.28 trillion.
In order to show growth, the consumer needs to start spending again, these are the categories of U.S. consumer spending, ranked from largest to smallest:
housing, transportation, food & beverages, and medical care.
For the US economy to show positive improvement the consumer has to:
1. Buy a new house - unlikely any time soon, this is by far the largest expenditure of any US household and will probably be put on hold in the next quarters.
2. Buy a new car, commute more often - unlikely to happens soon, unless car manufacturers find a way to reduce prices significantly
3. Buy more food & beverages - there will always be a steady demand for that so no big change up or down in the future.
4. Medical Care - now here is a category which I believe will see an increase, the coronavirus health shock will make the consumer take a second look at health issues and decide to increase spending on personal health.
So in total, there will be a significant drop in DGP in 2020, or, in the better case, the GDP will stay put,
Trade Smartly,
Alon
I think you've got some flaws in your predictions:

1. The interest rates are low, so there shall be more home expenditures until we see a bottom out event kinda like the 2008 recession. Someone in my family sold a house a few months ago, during the beginning of the pandemic fears (IMO the strongest and least well adapted part of it...) and my family doesn't own much more real estate than your average american. That was the only thing on the market.

2. manufacturers can always reduce prices in this way because they have a surplus. Cars in a sense are a mindless luxury item yet in today's society they have an invaluable ability to make someone money.

3. agreed

4. This part of your conversation is a little more interesting to me, zeroing in our microscopes a tad, what parts of the healthcare industry will rise, which ones will fall? This one might even prove to be the most catastrophic, as people don't want to see doctors and go to hospitals for more petty things now adays because they're afraid of you know what. I would not place any bets on plastic surgery and weight loss supplements for a while, but this is just my opinion.
 

Dujin333

Junior member
35 3
It seems to me that the Americans spent most of their savings, although maybe not much, but some of their money during the quarantine period, because at first there was quite serious panic and I think that they were somewhat unprepared for such a serious breach of their own stability. In addition, they didn't have the opportunity to multiply their income in many ways because many business areas had stopped. In fact, it seems to me that the situation is about the same in many countries around the world. Because it takes a certain amount of time and resources to get the economy back to normal. And now we need to take a more observant position in order to understand which countries and accordingly which assets will cope with it best and worst.
 

tomorton

Legendary member
8,087 1,195
I'd love to go and spend some money - but where?

Masking up to go to a restaurant doesn't seem like fun. Where's the atmosphere of sitting in a half-empty theatre or cinema? And what's the point of booking a holiday when you might have to come home early and quarantine for 14 days?

On the up side, I'm saving money.
 

ConfusedInvestor

Junior member
30 3
I'd love to go and spend some money - but where?

Masking up to go to a restaurant doesn't seem like fun. Where's the atmosphere of sitting in a half-empty theatre or cinema? And what's the point of booking a holiday when you might have to come home early and quarantine for 14 days?

On the up side, I'm saving money.
There seems to be a consensus among scientists that your less likely to get the virus outdoors, but being indoor in crowded places is asking for trouble.
 
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