Consumers spent a lot more at restaurants and bars in August, while cutting back on big ticket items like cars and furniture — and even online shopping.
Spending at food services and other eating places jumped 0.9 percent last month, while food and beverage stores saw a pickup of 0.3 percent. That compares with a drop of 0.9 percent at auto and parts dealers, and a 0.7 percent dip in spending on furniture.
“If there is an election uncertainty effect, it would not be surprising if restaurants were spared the pain: in principle uncertainty should restrain spending on durable goods more than spending on services,” wrote JPMorgan chief U.S. economist Michael Feroli.
Economists say it’s hard to quantify whether there is an election impact on consumers. Of course, there was also a savings from a decline in gasoline prices, which lowered sales at gas stations by 0.8 percent and likely put more money in consumer pockets.
“There were some comments (this week) that small businesses were becoming a little more cautious because of the election. I haven’t seen anything yet” to show it’s affecting consumers, said Jefferies chief financial economist Ward McCarthy. “I guess our approach to the election is eat, drink and be merry because in November we’ll all want to die.
The highly contentious U.S. election, where Democrat Hillary Clinton and GOP candidate Donald Trump are running neck and neck, has been expected to take a toll on the economy. Some economist have pointed to uncertainty as a factor, affecting mostly business spending.
The National Federation of Independent Business small business surveyfor August found some proof of that. The survey, released Tuesday, showed a surprisingly high amount of concern about the political environment at a level never seen before.
At an all-time high, 39 percent of business owners in the survey pointed to the political climate as a reason to hold back on expansion. There was also a jump in uncertainty about the economy and government policy.
“The political climate used to be background noise in the economy. It was always there, but small business owners focused more on general economic conditions,” NFIB President and CEO Juanita Duggan said in a statement. “Based on this data, small business owners now blame the political climate for the declining economic conditions. We haven’t seen numbers like these before, and it’s alarming.”
As for the consumer, it’s hard to tie the government’s retail sales data to the same concern. But there was a clear drop in expensive purchases.
Feroli said in a note that the drop could also be giveback for strong spending in the spring.
source”gsmarena”
