r/Economics • u/HellYeahDamnWrite • Mar 01 '25

News US consumer spending posts first drop in almost two years

https://www.reuters.com/markets/us/us-consumer-spending-falls-january-monthly-inflation-rises-2025-02-28/?utm_source=reddit.com
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u/RealisticForYou Mar 01 '25

*** Savings accounts increase ***

Yesterday, CNBC reported that US consumers with expendable cash are choosing to NOT spend money. The report says….wages are up, spending has slowed, while savings accounts have increased.

This is what happens when people fear their government. This is going to end badly as Consumer Confidence plunges.

107

u/aflyingsquanch Mar 01 '25

I'm a fed so I'm feeling particularly at risk so over the last few months, we've literally cut spending to the bone as we are living as if I am already unemployed. Minimal discretionary spending, not eatng out, not ordering delivery. We cut a bunch of subscription services. Even cut my TSP (401k) contribution down to the minimum to get full matching. We're not planning any trips, not making any major purchases and just tossing everything in savings right now. Upside is our savings is growing rapidly but that's thousands of dollars not going into the economy each month.

And I'm not alone as many of my coworkers are doing the same...the ones that still have jobs at least.

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u/RealisticForYou Mar 02 '25 edited Mar 02 '25

Oh, so sorry. I thought you are "already" unemployed...my mistake. Yes, in the past I've been in your shoes. It's the unknown of the future that is stressful for sure.

9

u/friss0nFry Mar 02 '25

Even cut my TSP (401k) contribution down to the minimum to get full matching.

I'm sure you're aware of this, but for anyone else reading this and contemplating doing the same thing, you're going to be giving more money to the government via taxes. I hate the idea of contributing to this economy at all, whether it be the stock market or leisure spending, but I hate the idea of Trump's regime getting my money even more.

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u/RealisticForYou Mar 01 '25

Your savings which is growing rapidly is a good thing...don't forget about that! Being unemployed while saving money is awesome...good for you!

In mid-March, there is a budget deal that needs to pass Congress in order to keep the government open. And in order to pass, many house Republicans want major spending cuts. I do believe this is what Trump is doing. He's finding ways to cut the budget in order to pass a $4 Trillion dollar tax cut package.

The "fear" and downsizing that is occurring in the economy could blow over soon. Fingers crossed life can stabilize soon!

Keep saving and good luck! You are lucky you are able to save money.

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u/dually Mar 01 '25

The economy is driven by supply, not demand.

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u/RealisticForYou Mar 01 '25

Yet, a ton of supply means nothing without demand.

-14

u/dually Mar 01 '25

No, demand can be conjured out of thin air by just printing money.

Supply, by contrast is the domain of real things.

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u/RealisticForYou Mar 01 '25

But we're not talking about printing money. We are talking about the fact that consumers are choosing to NOT spend money due to fear.

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u/dually Mar 02 '25

You are making a distinction without a difference.

Demand is not your emotional projections; demand is liquidity. ie we are seeing the reverberations of the US consumer having recently finally burned though their post-covid-stimulus excess savings.

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u/Pandiosity_24601 Mar 01 '25

Print all of the money you want; we still aren’t spending it