The American economy is trending positively once again with consumer spending and confidence both on the increase. The upward movement is on the shoulders of several stimuli including strong workforce performance, government stimulus money, and soaring consumer confidence hinging on vaccine rollouts.
On Monday, the CDC reported that half of American adults have now received at least one dose of the COVID-19 vaccine with 84 million fully vaccinated. The number of vaccinated US citizens is providing hope for lower case counts and fewer deaths in the coming weeks and is emboldening residents to find some way to move ahead in a ‘new normal’. Compared to other countries, the United States has been a world leader in vaccine rollout.
With more Americans vaccinated than not, it appears that normal spending habits are resuming in the nation, and there’s money to spend.
At the beginning of April, the Bureau of Labor and Statistics reported that 916,000 jobs had been added to the US economy in the previous month. Those results far exceeded expectations of 675,000 jobs for the month, and the unemployment rate dropped to 6%. That’s the lowest rate of unemployment since March 2020’s 4.4% before it peaked at 14.8% as the pandemic struck.
With the vaccination rollout in full swing for virtually anyone who wants it, there’s no reason to believe that it will see a significant spike due to the virus.
Payments from the third round of stimulus money have been delivered to most Americans by now. The most recent deposit for $1,400 per person added a serious financial boost to most homes in the country, and the potential of a fourth check is fueling spending even more.
Stimulus money can be credited for spurring spending in many areas, especially major purchases such as homes and vehicles. A family of four earning $150,000 or less in gross income combined was eligible to receive $5,600 in stimulus money, and spiking car sales shortly after funds roll out indicate that at least a small portion of recipients are splurging on a vehicle.
Indices of consumer sentiment in the automotive industry have consistently shown growth in recent months. Cox Automotive’s Market Insights for April 19 says that “consumers saw buying conditions improve from March, but the buying conditions level is still down from a year ago…”
Another index, Morning Consult, found that April’s consumer sentiment is up 1.7% despite sliding last week on higher COVID cases and worrisome news about the Johnson & Johnson vaccine.
Overall, the market appears to be trending positively with lower unemployment rates, excellent vaccination rollout, and financial assistance going out to most American households. For the auto industry, it’s great news for selling cars, and the balance of supply and demand is certainly in the dealership’s favor. With challenging new and used car inventory and buyers flocking to replace their cars – while incentives are still reasonably strong – it’s provided an opportunity like never before for dealers to hold the line on profits.
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