What: In spite of varying headlines, US consumption remains very high.

Why it is important: While spending remains high, it’s on experiences: dining, concerts, travels.

Despite rising interest rates, high inflation, reduced pandemic savings, and a cooling labor market, household spending remains strong. In August, Americans spent 5.8% more than the previous year, surpassing the inflation rate of less than 4%. The experience economy thrived, with companies like Delta Air Lines and Ticketmaster reporting significant growth.

Some financial experts attribute this behavior to consumers prioritizing short-term experiences over long-term goals due to the uncertainties brought about by the pandemic and other factors, like a challenging housing market.

Many are choosing to spend on experiences now, fearing they might not have the opportunity later.

Concerns about climate change are also motivating some to visit places before potential environmental changes.

However, there are concerns about whether consumers can sustain this level of spending, as factors like labor strikes, student loan repayments, and rising gas prices might force cutbacks. Recent surveys indicate a surge in consumer spending, which is unexpected given the prevailing economic conditions.

Many people are reevaluating financial norms, choosing to enjoy their money in the present rather than saving exclusively for the future.

American customers keep spending