Americans are ready to leave their houses again, and they’re taking their money out on the town with them.
That’s the upshot of a report that showed a broad shift in spending away from goods and toward services between March and April. A decline in purchases of things like furniture, clothing, and groceries was more than offset in April by increased spending on eating out, recreation, hotels and transportation as vaccinated travelers ventured out into a newly opened world.
Spending on services increased 1.1%, while spending on goods fell 0.6%. Total personal expenditures increased 0.5%, even though, without as many stimulus checks coming to mailboxes and bank accounts, personal income dropped 13.1%.
The services sector spending figures add to a spate of recent evidence that people are starting to move around more as the pandemic retreats. Jobless claims are down, summer travel is looking to bounce back to pre-pandemic levels, and gas is in high demand. When economists look at multiple economic indicators together, they see a booming economy that’s only getting better.
“Consumers are flush with cash, and after more than a year of having few places to go, the flood gates are finally open,” said Wells Fargo economists Tim Quinlan and Shannon Seery in a commentary.