Consumer Spending Slows Down in February
Economists said that consumer spending in February has experienced slow growth due to many factors including record-high unemployment rate, weak market, credit crunch, and fragile economy.
Meanwhile, experts believe that President Barack Obama’s policy has at least stabilized the credit market that will result to more economic productivity.
Economists said that consumer spending in February experienced slow growth due to many factors including record-high unemployment rate, weak market, credit crunch, low production, and feeble economy.
According to Bloomberg News survey, consumer spending has increased by 0.2 percent last month which is a slow growth rate compared to January’s 0.6 percent. This significant slowdown is a ramification of depreciating value of housing and properties.
Experts warn that consumer spending will continue to slow down due to massive layoffs which resulted to record-high unemployment rate in the US since 1930s. According to economists, another culprit for the slow growth is the disposable income, forcing consumers to forego buying expensive goods including electronic appliances and cars.
Meanwhile, experts believe that President Barack Obama’s policy has at least stabilized the credit market that may result to more economic productivity. Also, the President’s $787 stimulus package is expected to generate more jobs and to help struggling companies for the next couple of years.
After injecting billion-dollar stimulus money to the US economy, the Federal Reserve has recently announced its plan to release at least $1 trillion to further lower the mortgage interest rates and to buy loans of small businesses to boost production.
Since the beginning of recession, the labor market lost 4.4 million jobs.
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