What Do People Do When They Run Out of Stuff to Buy - Buy Services

The Purchasing Continues, Even If The Need For Tangible Items Runs Out.

An exercise bike,  a Netflix subscription, a new laptop, the ubiquitous air fryer, a Playstation 5 - if you could find one.

Americans were stuck at home for more than two years, so they bought a LOT of stuff. Furniture, electronics, even clothing to wear nowhere were all purchased in large numbers by consumers. According to new data, the trend is finally turning, and individuals are ready to purchase services once again.

The sale of goods in the United States - which includes non-durables such as food and clothing, as well as durables like automobiles and appliances - made up 31% of consumer spending before the pandemic. In spring 2021, before Covid-19 vaccines were widely available, that jumped up to 36%. Life was quite simple. Sit at home, browse online, find things you desire, realize you're not spending money on anything else, and make the purchase.

But in good news, the indications are now starting to show that civilization has turned the corner on getting a little more proactive.

Spending on consumer goods decreased for the second month in a row in December, falling to 34%, according to the Commerce Department. Spending on services increased by just 0.1 percent.

Consumers will have a lot of opportunities to spend in 2022, thanks to the robust employment market with 10.9 million job openings in December.

"All the indications are that it will be a big year for travel," according to Visa Chief Financial Officer Vasant Prabhu, adding restaurants and entertainment are likely to profit, too. "We see the shift to services continuing to gather momentum."

In addition, inflation is accelerating the shift away from consumerism. In December, overall prices climbed 10.7%, but service costs increased just 3.7 percent.

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