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
 

ConfusedInvestor

Junior member
31 4
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.
 

tomorton

Legendary member
8,418 1,343
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
31 4
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.
 

tomorton

Legendary member
8,418 1,343
The weekend before last went out and spent more money than in the previous 4 months. Had a weekend break at a stately country house hotel (in the south-east UK). The package price was very good value considering the quality of the place.

The staff were attentive but catering systems were just not in place. Waited well over half an hour for some lunchtime snacks and over an hour for any sign of food at the evening meal. All staff were inexperienced with covid working arrangements, some on their first post-covid shifts. Both restaurant manager and general manager were new and the place was clearly overwhelmed although occupancy was less than 50%. Restaurant temporary menu was the shortest ever printed.

In conclusion a waste of time being there under covid restrictions. Has put me off making any other pricey hotel/restaurant bookings while we're still socially distancing.
 

ConfusedInvestor

Junior member
31 4
The weekend before last went out and spent more money than in the previous 4 months. Had a weekend break at a stately country house hotel (in the south-east UK). The package price was very good value considering the quality of the place.

The staff were attentive but catering systems were just not in place. Waited well over half an hour for some lunchtime snacks and over an hour for any sign of food at the evening meal. All staff were inexperienced with covid working arrangements, some on their first post-covid shifts. Both restaurant manager and general manager were new and the place was clearly overwhelmed although occupancy was less than 50%. Restaurant temporary menu was the shortest ever printed.

In conclusion a waste of time being there under covid restrictions. Has put me off making any other pricey hotel/restaurant bookings while we're still socially distancing.

i went on a trip a couple months ago and it was fine except some of the anxious wierdness of low-budget (hehe, my favorite kinds of hotels to tell you the truth!) hotel staff, and some of my personal issues which flared up. Also, one person in the town i was staying in gave me wierd looks because i was eating outside without a mask.

The whole supply chain is in trauma/confusion mode a little bit right now, it's probably going to be like this for at least a year. I just try to be as respectful as possible to those who serve me, i think in the end spending time in nature, away from people, is probably the least stressful way to take a break from your obligations...
 
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WalletInvestor

Active member
120 30
[...]

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.

Medical spending for sure has taken a hit. What I'm curious about is how it will fare after the pandemic is contained. For example, many elective surgeries are being postponed. Also, long-term the prevalence of certain diseases such as obesity-related illness and mental illness is growing.
 
 
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