3 ms·

unlikely given consumer spending is at record highs. People are just buying different stuff.

• onlyrealcuzzo 7y ago
  Close to 60% of consumer spending is on housing, transportation, and healthcare [1]. Whether by choice or market forces, growth in those categories exceeds "other" categories. Savings -- at least in 2017, the last year I have data for -- turned negative. Considering housing by itself is over 20% of spending, and that >60% of the of population has fixed spending (either own their house outright, have an existing mortgage, are under rent control, or are homeless and don't live in shelters) that only marginally increases in cost per year -- it is STARTLING to me that spending as a whole is growing by 5.3%. Spending on rent only grew by 3.3% and that is largely NOT fixed. Spending on housing grew by 10.4%!!! And almost 80% of that category is fixed!!! It's insane! That means, when people buy new houses, they are spending WAY more on housing than they were before. And it can't be more clear, really. 65% of home buyers are essentially "trading" homes -- that is selling their existing to buy another. If they make up the majority of purchasers, and prices are up 10.4% -- they're likely spending more on housing. A lot more! I'm no economist, but that seems to have every indication of speculation to me. Source: * https://www.bls.gov/news.release/cesan.nr0.htm https://www.bls.gov/news.release/cesan.nr0.htm