Are Americans Spending Again?

I hate to sound like the eternal, buried head in the sand optimist, but every time I read a sliver of good news about our current economic state, it makes me have hope that this whole recession business may be behind us once and for all. After all, we are the greatest economy in the world, or we at least once had that reputation, and we are still the “land of opportunity”, so it only makes sense that we would emerge from the ashes as a phoenix does, and again begin spending and making money hand over fist, right? Right?

Ok, not so fast, but there was a tiny little sliver of good news as media outlets reported that it seems Americans are loosening up about spending money. How do they really know though? Well, it’s mostly attributed to a growth in the GDP and better numbers from most earnings reports of companies that report every quarter on how they’re doing.

It’s the big ones that are a sort of landmark of how we’re doing as an economy though, and those companies by and large submitted decent numbers considering the turmoil we’ve been through in the past three years.

However, when you consider that a lot of this recovery is due to government spending, and a lot of the better reported profits are because so many companies cut thousands of workers collectively and are now operating at bare bones costs, it’s not such a good thing. This recovery, in order to be sustainable absolutely must rely on companies hiring again, and hiring left and right at that.

Just because Americans are loosening up their spending habits a little bit, it’s not quite time to break out the champagne. Those same Americans are often out of work or have had hours cut or are enduring some other financial hardship, so it’s not all good news. Also, one can only go so long saving before they erupt into a spending frenzy. After all, that’s human nature. It doesn’t mean that this will happen on a regular basis, and that’s really what we need to sustain a full economic recovery at this point.