US Consumer Spending Increases in May: Hispanics’ Trillion-Dollar Spending Power, Interest Identified as Jobless Rates Falls
Consumer spending in the United States improved in May, but the figures are considered "weak."
The Commerce Department announced consumer expenditures increased by 0.2 percent. Although the spending increase is small, it is considered as an improvement from April's "flat" report. Prior to April consumer spending increased by 0.8 percent in March.
Consumer spending in the U.S. accounts for more than two-thirds of the country's economic activity. Although the Commerce Department noted consumer spending increased, when adjusted for inflation, the U.S. received its second consecutive month of consumer spending decreases.
A potential reason for the slow consumer spending growth was healthcare, which barely increased for a second month while automobile buying boosted, comprising more than half of the rise in durable good expenses.
For some analysts, the forecast was a 0.4 percent increase in consumer spending for May. If June does not bring in a "big increase," spending during the second half of 2014 might be slower. According to Capital Economics' Senior U.S. Economist Paul Dales, the second quarter of 2014 (April through June) could encounter an annual rate increase of 1.7 percent, but it "wouldn't be much of a rebound" following the 1 percent growth from the first quarter.
The overall U.S. economic growth, as measured by the gross domestic product (GDP), declined at an annual rate of 2.9 percent during the first quarter, which is the biggest drop since 2009. A survey of median projection economists by Bloomberg estimated the second quarter's economic performance will improve by 3.5 percent.
For the 52 million Hispanics in the U.S., the population's spending power reportedly increased and will continue to grow to $1.5 trillion by 2015, an increase of 50 percent from 2010. According to ThinkNow Research, the economic situation and outlook for Hispanics improved compared to last year. Hispanics, at 70 percent, indicated their household finances have remained the same or improved compared to 65 percent in 2013.
While cars were a popular item to buy during May, Hispanics are more inclined to acquire an electronic device, such as smartphones, tablets and a computer, before purchasing a brand new car.
The Labor Department reported initial jobless claims dropped by 2,000 applicants. When seasonally adjusted, the total number of jobless applicants is 312,000 for the week ending June 21. The Department of Labor stated there were no special factors for the drop.
The states with the largest increases, for the week ending in June 14, were Pennsylvania, California and Wisconsin. The states with the biggest decreases were Georgia, Missouri and New York.
The total number of people claiming benefits for the week ending June 7 was also disclosed to 2,441,475, which is an increase of almost 38,000 from the previous week. In comparison to the same week in 2013, 4,549,463 people claimed benefits.
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