After a year of being shut indoors, a lot of people are saying, “Get me out of here! Whatever it costs!”
I’d like to fly out to see family, too, but seeing the mess in the airports I may wait till fall…or maybe next year. It’s not that important to me since I can walk outside in my beautiful area. But @OrmontUS lives in a small apartment in Brooklyn. Currently, he and his DW are on a 6 month round the world cruise.
Consumers are splurging on expensive but fun experiences, from nights out to concerts — and that may force central banks to keep raising rates.
By Andrew Ross Sorkin, Ravi Mattu, Bernhard Warner, Sarah Kessler, Michael J. de la Merced, Lauren Hirsch and Ephrat Livni, The New York Times, June 23, 2023
Consumers are splurging on pricey meals, through-the-roof airfare and expensive concert tickets. … When inflation runs persistently high, consumers normally cut back. If they do spend, it is typically on so-called durable goods: a new washing machine, a car, a house. The thinking is that it’s prudent to bring forward such purchases if you believe you’ll spend more for them in the near future. Economists and central bankers are seeing a bit of that, but also higher spending on discretionary items, such as travel and nights out…
A summer of fun could invite a tougher policy response [from the Federal Reserve] this autumn.… [end quote]
I don’t know if the spending on fun has enough Macroeconomic impact to force the Fed’s hand…but the service economy is much larger than the goods economy, so maybe.