Are you starting to spend more or still cautious?

Consumers are returning to the economic driver’s seat.

The economy grew at a 3.2 percent annual rate in the first quarter, primarily because consumer spending increased at the strongest rate in three years, the Commerce Department reported today.

Consumers — representing 70 percent of our economy — are taking the baton from the manufacturing sector, which boosted the economy in the fourth quarter of last year. At that time, factories churned out goods for businesses that had let their stockpiles fall during the recession, Associated Press reports.

But, the restocking of inventories is nowhere near as sustainable for growth as consumer spending can be.

So, are you starting to open up your wallet? Planning on a major purchase?

Or, are you building up your savings and paying down debt, still worried about the high unemployment rate?

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36 comments Add your comment

joe joe

April 30th, 2010
9:44 am

No, no & yes.
I don’t know what world some of these “specialists” live in. Things are as still bad as last year & the year before. Until people start getting jobs & we stop spending money in Washington that we don’t have nothing will improve.

Bobby

April 30th, 2010
10:01 am

I don’t see where the economy is improving either, except on paper. People are still being laid off, jobs are difficult to come by. I have managed to pay down significant portions of my debt and increase my savings account, but I had the landline phone as well as cable disconnected. I also keep my cell phone bill around $50.00/month. I don’t see any major purchases on the horizon.

NOAH

April 30th, 2010
10:16 am

I see the economy improving but people don’t believe it yet which is natural. Lay offs will always be happening but the key is that we are seeing net job GAINS, not losses. In my family we have benefited by landing a better job. But beyond that the numbers don’t lie that things are slowly getting better although many are still trying to convince us the government and economists are making it up.

David Granger

April 30th, 2010
10:39 am

Tells you all you need to know about this country: The economy has been in a tailspin the last two years, falling off by 10% (more or less) each year. Then it increases 3.2% in the first quarter, and the rallying cry is “Spend More!”

The Taxman Cometh

April 30th, 2010
11:37 am

Spend more? Major purchases? Are you nuts? We have tax increases that are going to kick off on Jan. 1st 2011 not to mention the tax increases from the health care “experiment”. The news last week that health insurance premiums WILL GO UP under this plan according to CBO.

The lead story on AJC today are huge rate increase request by GA Power due in part to pension and benefit costs for employees?

And the question here is are you going to spend more? Sure I/We are. To the damn government!

Really?

April 30th, 2010
11:50 am

Yes, I am spending more. My grocery bill has increased. My gasoline budget has increased although I am driving less. I guess my power bill will be the next increase. My credit card company (Citibank!) raised my rate even though I have low debt and have never made a late payment on anything in 18 years! So YES! I am spending more and receiving very little in return! My company has also laid off more people this year than last year. More lay offs are on the way!

TTPB

April 30th, 2010
11:53 am

I do not believe in all these so-called “reports of economic recovery”. If they’re true, it’s only temporary. I don’t believe they are an accurate barometer of what’s really going on; and would not be surprised if they are “subsidized” by interested parties. I did not lose my job and still have my income, but I am nowhere near feeling comfortable about the economy. Looking ahead, times will get worse when all these rate hikes and new taxes kick in …

The Taxman Cometh

April 30th, 2010
12:09 pm

Oppps…I forgot to include the “fiscal commission” headed by Mr. Simpson and Mr. Bowles. We all KNOW that tax increases are going to be “recommended” by this commission in addition to my above cheery post. Hey, let’s not forget about the wonderful VAT that “is not off the table”. The government WILL NOT stop spending beyond it’s means until, we the people, are dead a$$ broke.

Where will we get all of this “extra” discretionary $$ for major purchases and the like. Sorry, but it’s going to be gone out of all of our collective posteriors.

Johnny Nam

April 30th, 2010
12:37 pm

Spending more?? You Betcha!!!! Gas prices are up, groceries are up, services are up. Of course spending is up.
If you do have a little more disposable income, ya better sock it away because we are fixin’ to get slammed with more payroll deductions and taxes than we have ever experienced.
Thanks Obama…….’preciate it.

Hungry Gringo

April 30th, 2010
12:44 pm

Heck yeah I’m spending more; this recession has been great. Restaurants have sweet manager’s specials, stores are having sales galore, even beer is cheaper. I bought a condo for 20% less than the previous owner paid for it with a tiny interest rate, and I got a huge HDTV to put in the living room for hundreds less than MSRP. To top it off, Uncle Sam (or Uncle Hussein now, I guess) gave me 8000 bucks for being a first time homebuyer; I’m thinking about buying one of those repossessed cars for cheap. Thanks for the recession President Bush!

joe

April 30th, 2010
12:54 pm

Quit blaming Obama you idiots. Look at the bigger picture and over the long term. Think about off-shoring jobs, rampant corporate greed, dependence on foreign oil, disproportionate wealth, two costly wars, wasteful spending (both personal and federal), etc. We’ve had problems with our version of the capitalist system for years and the bill is just coming due. Too bad so many of you don’t even realize you are victims of your own stupidity… you are part of the problem!

nita

April 30th, 2010
1:02 pm

no, kids nor myself have not purchased new clothes since school started last year with the exception of my daughter buying her own prom dress. Spending more the feed the family and gas. Desperately need new clothes and shoes. Oh well, i’m not the only one in this boat.

nita

April 30th, 2010
1:03 pm

forgive the double negative.

Charles

April 30th, 2010
1:08 pm

As a person who commutes almost 100 miles per day, I am spending more- on gas!

BT

April 30th, 2010
1:16 pm

There are signs of recovery in my industry but it still seems pretty unstable. The wheels to recovery won’t gain any speed until consumer confidence rises, so hopefully numbers like these will help that, whether they are true or not. If you are lucky enough to have disposable income, minimal debt, thinking of starting a business, making a big purchase, etc. then do it. It’s the only thing that is going to get us out of this mess.

Suki

April 30th, 2010
1:28 pm

Spending lots of $$$$….we women keep the economy going with our love of shopping!

Suki

April 30th, 2010
1:30 pm

PS… and for all those Palin folks that say, Drill Baby drill….look at the Gulf coast now…sheesh! Another disaster for poor New Orleans with the oil spill…

Mark Makers Dogg

April 30th, 2010
1:30 pm

Opening wallet, closing savings account and living the grasshopper way. Carpe diem. Government now pays up to 99 weeks unemployment, my healthcare and the bank won’t evict me from my house for at least 9 months. Rents are cheap but my beer budget seems to be pinched every month. I’m lovin the spread the wealth arrival and thankful that President Obama has now acknowledged publicly that at some point enough money is enough. I am sending in my resume for a position on the Panel Acknowledging Your Contribution for All People (PAYCAP)! I hoped for change and I got it!!

DannyX

April 30th, 2010
2:13 pm

I say keep blaming Obama.

The recovery is doing better than expected at this point. Obama has turned things around. The recovery will be known as the “Muslim Miracle.”

The man from Kenya saves America.

God Bless America. And God Bless Kenya too!

dom youngross

April 30th, 2010
7:37 pm

People with their heads on straight spend/save ‘disposable’ income and make major purchases the same way no matter how the economy is doing or who is president. I’m one of those. Hey, check out pawn shops, they’re going gangbusters. Obama will inevitably cite that as evidence of a recovery. On second thought, Obama will leave Biden to pound that one.

TnGelding

May 1st, 2010
12:03 am

We’ve been debt free for years and have been patriotically spending for over two years. Hope we don’t ever need the money.

Bush and Obama have brought the economy back from the brink. Happy days are indeed here again!

TnGelding

May 1st, 2010
12:03 am

Buzz G

May 1st, 2010
8:12 am

I don’t need to spend more. Obama and the Democrats are doing it for me. Trillions of dollars in spending; spending money they don’t even have. They now own one half of all mortgages, many bankrupt banks, bankrupt car companies, one big bankrupt insurance company, a bankrupt pension plan, a bankrupt medical plan and who knows what else. And what do we have to show for it? IOU’s payable to China, Japan, the middle eastern oil chiefs, and just about every one else. Nearly $14 trillion in debt to the world. Obama and Pelosi don’t care that we will never be able to pay it back. They will just kick the can down the road and let someone else deal with it. And that someone else will be our children and grandchildren. We will suffer the consequences of this horrendous debt for 30 or 40 years. Our children and grandchildren will judge us harshly, as well they should. And Henry Unger can’t even bring himself to mention it. It is the 800 pound gorilla sitting in the middle of the room and no one dare mention it.

TnGelding

May 1st, 2010
8:17 am

We bought a mattress in Jan. that was made in GA. We bought a patio set in March made in GA. We bought a new set of tires in April (and you guessed it) made in GA. I’m negotiating with a local dealer to lease a Sorento made in GA, but they won’t back off of the MVA ($1,900) or the protection package ($1,200). LOL! Looks like I’m going to have to go NC to buy one. (MVA = Market Value Adjustment)

TnGelding

May 1st, 2010
8:24 am

Buzz G

May 1st, 2010
8:12 am

They INVESTED in AMERICA and are going to take on debt reduction later this year! Think austerity! Our children and grandchildren are in line to inherit the part of the $55 trillion in household wealth they don’t already own. They’ll be fine.

Buzz G

May 1st, 2010
9:24 am

TnGelding,

Obama and the Democrats will take on debt reduction later this year the same way Madoff took on honesty. Not before forced to do it and not before lots of people have lost a lifetime of saving. And Obama is investing in America the same way Madoff invested in himself: with other people’s money.

JH

May 1st, 2010
9:27 am

” I’m negotiating with a local dealer to lease a Sorento made in GA ”

Leasing an automobile instead of buying is the one of the biggest wastes known. Who cares if the Sorrento is made in GA, it’s still a Kia. Talk about really throwing away your money.

TnGelding

May 1st, 2010
9:42 am

JH

May 1st, 2010
9:27 am

Lease something that depreciates in value; buy something that appreciates. My only concern is it’s a new model.

And what might I ask are you driving?

Buzz G

May 1st, 2010
9:24 am

Get your head out of your rearend and take an honest look at the facts. The recovery has been near-miraclulous! Your partisanship is showing.

TnGelding

May 1st, 2010
9:46 am

Buzz G

May 1st, 2010
9:24 am

Anyone that lost, or loses, a lifetime of savings was/is stupid and greedy!

truthtoall

May 2nd, 2010
12:07 am

Obama and the democrats. Bush and the republicans. Are RESPONSIBLE for high electric bills, tornado’s, water damage. You not getting to work on time. All of your past due bills. The fish not biting. The apocalypse. Jesus riding a donkey into Jerusalem. Your house payments. You getting fired. All divorces. Your dog dying of dysentery because you feed him OL’Roy. Not to mention all wars. All future wars and probably even the Civil War. Some of you people need to get a grip. Try running your own life. No one else really cares about you anyway.

TnGelding

May 2nd, 2010
12:53 pm

Thank goodness Jesus loves us!

Yeah, leasing a car at half the price of a payment and driving a new one every 3 years that’s always under warranty is a stupid idea when you need safe, dependable transportation.

All we need now on the energy front is a nuclear “accident.”

Spend it All!

May 2nd, 2010
2:33 pm

I just got a new job and will be spending like crazy!! I’ve got a long list of things I want to buy, including a new car, 65 inch LCD TV, blue ray disc player, new granite countertops for my lake place, etc.!!! The recession’s over—let the money flow!!!

JWC

May 2nd, 2010
3:33 pm

Let me start by saying that I am a fiscal conservative 1st and foremost, so I am angry at both political parties.

We are, by definition, out of the recession now that we have had 3 quarters in a row with growth in GDP (3Q & 4Q 2009 & 1Q 2010). I have always felt that the federal government spending would stimulate growth to a degree. Ronald Reagan & Barrack Obama have very little in common idealogically, but they do have a few things in common. They both enherited a miserable economy. They both spent huge amounts of federal money to stimulate economic growth. It took President Reagan at least 2 years to pull us out of the misery of the early 80’s. (Do you remember inflation of 15% & mortgage rates peaking at 21%? I do.)

Reagan had his critics then (Reaganomics & “Trickle Down”, Obama has his critics now (Obamanomics). In both cases, the criticism was somewhat justified & absolutely political.

I think President Obama will eventually be vindicated in terms of fostering economic growth (GDP). As of Friday, is proving to be the case. Employment growth lags economic growth. Always has, always will.
Employment will come, but to what degree?

This leads me to my main point. I was not really concerned that growth would return at some point. What really concerns me the most is how will the recovering economy react to the federal spending?

Ronald Reagan & Barrack Obama both spent like madmen early in their terms & it spurred economic growth. That is where their similarities end. The HUGE difference between the two was that, across the board, Reagan moved to lower tax rates and Obama will (eventually) move to raise them (whether it be by income or value added taxation).

Reaganomics spurred economic growth & ultimately raised income tax revenue by cutting taxes. (We never really “grew” our way out of the federal deficit, though. That is a myth that can easily be debunked by checking out the CBO website.)

It appears that Obamanomics will eventually raise taxation & (if the enormous spending is capped) cut into the federal deficit. This will probably (not absolutely) come at the expense of true economic growth.

My MAIN fear is what the current spending policies will do to inflation & interest rates as the economy recovers. Economic growth will show but how much will come from rising prices vs. true volume growth. What good is a 10% cost of living raise if I buy less with it because prices have risen by 12%?

The stock markets appear to be holding but the bond markets as measured by the yield curve are looking more and more inflationary over time.
If President Obama focuses on inflation & interest rates and away from social reengineering & income redistribution, then we will be OK.

…but he must do this now. Hopefully, a congressional election debacle for the Democratic Party will force the Administration & Congress to focus on the economy going forward.

truthtoall

May 2nd, 2010
5:20 pm

I was watching several politicians on Cspan the other night. Democrats and Republicans. Questions from the audience. It got candid. The air conditioner must not have been working. One guy in the audience asked what about full employment. One of the politicians asked? Do you have a job. Guy answered yes. Politician replied what do you care then. Another politician said. Look you people need to make plans and stop pestering us. They looked a little stunned. Another politician said look. If you lose your job do you really think I am coming over to take care of your family? I have my own problems pal they don’t include you little part of the world. Another politician said look here. I don’t even care if your dog dies. If your unemployment runs out, go find a hot dog wagon. I’m not your mother.

Lacka Data

May 3rd, 2010
11:52 am

I am spending less and looking for ways to trim expenses even more. Most of the financial data I’ve seen indicates this recession/depression will last a minimum of 2 more years and if typical for a depression another 7 years.

Current factors to consider are bankruptcy rates – still record high
Food stamp use – 1 in 8 Americans – record high – this is the modern “soup line”
commercial real estate continuing to collapse
residential real estate – loans resetting out to 2014 means instability at least until then.
Unemployment benefits ending for millions of Americans as claims run out.
Unemployment rates remain extremely high even with temporary census hiring.

There can be no recovery without jobs and economic stability.
Wide spread fraud on Wall Street makes it very likely that the current rally is a facade and has no underlying value to support the numbers, this means a plunge in the indexes will re-occur and since there has been no change in financial regulations, all the elements from the last crisis remain, awaiting a trigger event to cause another melt down.

I’m saving as much as I can in cash and I’m spending as little as I can.
Fortune favors the prepared, darling – Edna Mode

TnGelding

May 3rd, 2010
9:31 pm

JWC

May 2nd, 2010
3:33 pm

Like they haven’t been focused on the economy? You’ve fallen for the GOP and medias line. But I agree, we have good reasons to still be worried. We simply have to bring almost all of the troops home and recirculate their pay in the good ole USA.