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The ability to spend is constrained by aggregate income and available credit in society. Shifts in spending from services to goods can only alter consumption p

The ability to spend is constrained by aggregate income and available credit in society. Shifts in spending from services to goods can only alter consumption patterns so much. Here is the Fed data on services spending: https://fred.stlouisfed.org/series/PCESV https://fred.stlouisfed.org/series/PCESV As you can see, services spending is equivalent to 2019 levels today, while goods spending is 20% higher. Consider the level of fiscal stimulus, monetary stimulus through lower rates (cheaper credit), and expense reduction (moratoriums, forbearance). The sheer magnitude of demand stimulation is frankly obvious, even without digging into the data. Of course, the data backs up this theory as well. Saying it's "covid" isn't saying anything at all. You have to quantify what you're suggesting. What is the mechanism that can explain persistently higher goods spending? The data doesn't bear out substitution as the primary mechanism, either way.

ec109685 5y ago
There’s a backlog of savings from limited service spending that is being worked through right now.
- adam_arthur 5y ago
  Do you disagree that aggregate personal income was massively enhanced through stimulus spending? The facts show this. You seem very intent on not considering that fact when it's the most obvious factor by a wide margin, with all of the data supporting it. Are you aware of the size of federal deficit spending in 2020/2021? The level of monetary policy easing leading to more credit availability to consumers? It's intellectually dishonest to attribute elevated retail sales solely, or even primarily to the substitution effect
  - ec109685 5y ago
    You can see here that the trend line for imports is consistent for the past 4 years: https://tradingeconomics.com/united-states/imports https://tradingeconomics.com/united-states/imports So you could say that it’s the deficit (e.g. the big tax cut from 4 years ago) that precipitated to this. My point is that “stimulus equals problems at the ports” is likely an overly simplistic answer.

ec109685 5y ago

There’s a backlog of savings from limited service spending that is being worked through right now.

adam_arthur 5y ago
Do you disagree that aggregate personal income was massively enhanced through stimulus spending? The facts show this. You seem very intent on not considering that fact when it's the most obvious factor by a wide margin, with all of the data supporting it. Are you aware of the size of federal deficit spending in 2020/2021? The level of monetary policy easing leading to more credit availability to consumers? It's intellectually dishonest to attribute elevated retail sales solely, or even primarily to the substitution effect
- ec109685 5y ago
  You can see here that the trend line for imports is consistent for the past 4 years: https://tradingeconomics.com/united-states/imports https://tradingeconomics.com/united-states/imports So you could say that it’s the deficit (e.g. the big tax cut from 4 years ago) that precipitated to this. My point is that “stimulus equals problems at the ports” is likely an overly simplistic answer.