Voices of con­sumers: Jobs re­port shows in­cli­na­tion to spend

Kuwait Times - - BUSINESS -

Amer­i­cans fi­nally feel con­fi­dent enough in the US econ­omy to splurge.

Fri­day’s jobs re­port sug­gested that many of the hefty to­tal of 271,000 po­si­tions added in Oc­to­ber re­sulted from con­sumer spend­ing - and the ex­pec­ta­tion that solid spend­ing would ex­tend through the hol­i­day shop­ping sea­son.

Peo­ple are treat­ing them­selves to gourmet ham­burg­ers, ex­panded wardrobes and new cars. Their spend­ing has off­set the global weak­ness that has ham­pered the manufacturing sec­tor, jarred the stock mar­ket and de­pressed oil prices.

The econ­omy re­mains far from fully healed. Yet job growth has gen­er­ated more con­fi­dence and helped power a re­cov­ery en­ter­ing its sev­enth year.

The gov­ern­ment said res­tau­rants and bars em­ployed an ad­di­tional 42,000 work­ers last month. Cloth­ing stores added 19,500, auto deal­ers 5,600.

Roughly half the jobs added came from just three sec­tors that de­pend on con­sumers: Health care; re­tail; and hos­pi­tal­ity and leisure. Over­all, the hir­ing helped push the un­em­ploy­ment rate to a seven-year low of 5 per­cent. It showed that even the slow re­bound from the Great Re­ces­sion is gen­er­at­ing trac­tion af­ter years of sub­par growth lev­els.

In Bos­ton, Michael Leonard is look­ing to buy a car. “I’ve got a higher salary and lower ex­penses up here,” said Leonard, of Bos­ton’s Back Bay neigh­bor­hood, who started a new ac­count­ing job in April af­ter mov­ing from Charleston, South Car­olina.

He’s been buy­ing lunches at res­tau­rants twice a week and go­ing out to din­ner about once a week, more than he did in Charleston. And he now plans to up­grade to a nicer ve­hi­cle than he first in­tended. “I’d be get­ting used,” Leonard said. “Now I’m look­ing at new.” Af­ter re­cently grad­u­at­ing from col­lege, Chris­tianne Kin­der found a job man­ag­ing cus­tomer

ser­vice in Bos­ton and “more dis­pos­able in­come” faster than she ex­pected.

She doesn’t have a car and spends lit­tle on trans­porta­tion, giv­ing her more to spend on clothes and food. “I spend most of my pay­check on T.J. Maxx,” said Kin­der, a self-de­scribed “foodie.”

Even as the econ­omy im­proves, some peo­ple are still wait­ing for their ex­penses to be­come more man­age­able. In ci­ties like Den­ver and San Fran­cisco, sharply ris­ing hous­ing costs have put the ben­e­fits of an im­prov­ing job mar­ket out of reach for many res­i­dents.

Chris Harvey, a 32-year-old Den­ver res­i­dent, be­moaned the city’s high rents and said his spend­ing habits haven’t changed. “The rent - it’s go­ing through the roof,” Harvey said , smok­ing a cig­a­rette out­side his apart­ment build­ing a few blocks from the state capi­tol.

Harvey said he’s pay­ing $785 for a stu­dio, and to make ends meet, he’s rent­ing part of it to friends who need a place to stay. He doesn’t plan to spend any more than usual dur­ing the hol­i­day shop­ping sea­son.

The low oil prices have min­i­mized in­fla­tion. But that’s hurt some who man­age on fixed in­comes.

In St. Paul, Min­nesota, Lynne Navratil, 64, re­tired af­ter work­ing for the Ram­sey County gov­ern­ment. The rel­a­tive ab­sence of in­fla­tion means that So­cial Se­cu­rity re­cip­i­ents like her are re­ceiv­ing no cost-of-liv­ing-ad­just­ment, even as her ex­penses for rent and health care have in­creased.

“I do love to eat out a lot, but I’m re­ally hav­ing to bud­get closely in or­der to make it each month,” she said. “It doesn’t feel good.”

Navratil said she’ll be spend­ing less on hol­i­day shop­ping this year than she usu­ally does “be­cause I can’t af­ford it.”

The re­vival of down­towns around the coun­try has helped boost spend­ing on night life and con­struc­tion. De­mand for new build­ings helped raise con­struc­tion wages 1.5 per­cent over the past month - an 18 per­cent an­nu­al­ized in­crease - to an av­er­age of $25.40 an hour. That com­pares with an av­er­age 0.4 per­cent month-over-month in­crease for all rank-and-file US em­ploy­ees.

New Or­leans’ cen­tral busi­ness dis­trict is full of newly con­structed loft apart­ments and hip res­tau­rants pop­u­lar with mil­len­ni­als who like be­ing able to walk every­where.

“I’m not the kind of guy who re­ally buys a lot of clothes, but I do eat out a lot,” said Todd Jones, a res­i­dent of the neigh­bor­hood, whose most re­cent restau­rant out­ing was to the newly opened Com­pany Burger next to his of­fice.

Jones said he hasn’t par­tic­u­larly changed his pur­chas­ing habits in re­cent months. But has no­ticed in his ac­count­ing work that his clients are far­ing bet­ter - bring­ing in more busi­ness and, in turn, pay­ing their work­ers more. Belinda Laws, who works at UBS Financial Ser­vices in New Or­leans, was wait­ing out­side her of­fice Fri­day to buy lunch at a Thai food truck.

She cred­ited her im­proved financial sit­u­a­tion in re­cent years to the fact that her chil­dren grad­u­ated from col­lege and no longer need her sup­port.

Laws plans to take a trip to New York this hol­i­day sea­son to visit her daugh­ter. She’s also no­ticed that many of her friends and fam­ily in re­cent years have seen their financial sit­u­a­tions im­prove as well.

“It’s bet­ter to­day than it was two or three years ago,” Laws said. — AP

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