americans say they are more anxious about the economy but they are spending record amounts of money as if they have no worries at all the trajectory of consumer spending which amounts to 70 of of everything that goes on in the economy is pivotal to the strength of the us recovery can it continue at a rapid pace or will it peter out soon many analysts predict consumer spending will start to fade by early next year and lead to slower us economic growth particularly with congress and the federal reserve throttling back on emergency financial stimulus high inflation is adding to the burden on consumers yet others counter that a huge pile of savings and higher household wealth are enough to keep consumers spending and the economy humming through next year so far consumers have shown no willingness to cut back they point out “there is no demand problem in the us” said neil dutta head of macroeconomics at renaissance macro research by some measures it would be easy to think the us economy is headed for a rough spell after all businesses are handcuffed by major shortages inflation has soared and emergency aid from washington is drying up the surge in coronavirus delta cases didn’t help either yet the main driver of the growth the american public is still acting very optimistically even as people tell pollsters they have lost confidence in the economy they are still spending large sums of money and show little sign of pulling back read us consumer sentiment slips to near decade lows a pair of recent reports underscored the resiliency of us households and the broader economy start with the astonishing trend of of people quitting their jobs in record numbers during a pandemic a record 427 million people quit in august almost 3 of the entire workforce people quit in greater numbers when they think they are financially secure that the economy is doing well and that they can find a betterpaying job read ‘i quit’ a record number of us workers are telling their bosses sure enough that’s what is going on a growing labor shortage has forced companies to compete for workers they are offering bonuses higher pay and better benefits to attract employees in many cases poaching them from rivals “employers are no longer calling the shots and the balance of power has clearly shifted in labor’s favor” economists aneta markowskia and thomas simons of jefferies llc wrote in new report such talk is rife at big businesses and small one senior executive at a large company complained about “employee flight to betterpaying jobs” in the most recent national survey by the institute for supply management another fretted about ‘labor shortages experienced at all levels” the nation’s most influential smallbusiness lobbying group for its part said the number of companies offering higher pay rose to a 48year high in september even so a record number said they still could not fill job openings businesses are trying to hire millions of people of course because they have so much demand for their goods and services so much demand in fact that they cannot meet it consider retail sales they jumped 07 in september following another big increase in august confounding wall street expectations for a small decline americans it turns out are still buying plenty of stuff although high inflation explains part of the increase in retail sales other measures of consumer spending have stayed surprisingly robust americans are now spending more than ever even when inflation is taken into account businesses aren’t expecting consumers to slow down either retailers are frantically trying to stock up ahead of the holidays at year end in anticipation of the strongest spending in several years why are americans so ready and willing to spend the strong labor market is lifting their wages for one thing and giving people the confidence to believe they’ll still have a job a year from now many also are being asked to work more overtime and that’s helping to pad their paychecks the number of hours the average employee worked in september was the highest on record when compared to any month before the pandemic millions of people still haven’t spent all their government stimulus money either and those who kept their jobs during the pandemic were able to save lots of money by foregoing the usual expenses on gas clothing travel commuting and so forth to top it off home values have soared and many home owners were able to save a bundle by refinancing at extremely low interest rates the stock market djia has also soared to record highs and boosted the wealth of millions of households “consumers as a whole have accumulated a tremendous amount of excess personal savings during the pandemic and have seen robust wealth gains from their home value and retirement accounts” said chief economist scott anderson of bank of the west pandemic fatigue is another factor driving the increase in spending americans still have a lot of pentup demand after being cooped up early in the crisis they want to get back to doing what they were doing before the pandemic go to a baseball game attend the theater fly to visit families eat at restaurants they are even willing to pay higher prices for now consumers have become less price sensitive economists say because of their improved financial standing all of this demand both in the us and elsewhere has helped spawn the huge supplychain issues that are bedeviling the economy and fueling the largest increase in inflation in 30 years read us inflation rises sharply again in august and stays at 30year high companies can’t get enough parts materials and now labor to produce what their customers want shortages are cropping up at businesses ranging from grocers to auto dealers and even buying a house has become a lot harder these problems are unlikely to stunt customer demand if consumers can’t find what they want to buy the more bullish economists note they’ve shown a propensity to spend money on something else ” the pandemic did nothing to change americans’ willingness to spend money” said chris zaccarelli chief investment officer for independent advisor alliance