Retail spending is up, and consumers aren’t showing signs of dropping how much they shop.
Brick-and-mortar store sales rose 0.8% in May, with big gains across clothing retailers, restaurants, and home improvement stores including Lowe’s and Home Depot. Physical stores even outpaced online retail giants like Amazon.
Overall, retail spending, which includes everything from sporting goods to autos, is up 5.9% from this time last year, at roughly double the rate of inflation.
The reason? According to a government report out today, American consumers are feeling more optimistic thanks to a surging economy and job market. The unemployment rate hasn’t been this low since 2000. And with a little extra in their pockets each week thanks to President Trump’s tax cuts, it’s likely there’s a bit more spending money to go around.
Consumers may eventually slow spending and start saving again as the Federal Reserve is expected to continue to raise interest rates through 2019 (after raising rates yesterday). So while this spending spree may not continue, Barclays economists remain hopeful, projecting the economy will expand at 3.5% in 2018, up from an earlier forecast of 3%, according to CNN.