A presidential election that’s supposed to be all about the economy shifted to foreign policy last week, most notably due to world events, including a continuation of violent anti-American protests in the Mideast, that couldn’t be ignored.
A less-discussed factor in the campaign shift may be growing signs that although Americans still believe the U.S. economy is a hot mess, they are becoming less fearful about participating in it. For example, the latest data indicate average annual spending by consumers has increased at its fastest rate since 2006.
The Wall Street Journal points out that the 3.3 percent increase in spending in 2011 was partly due to a 3.2 percent increase in consumer prices for everyday goods. But it’s still a good sign. Consumers spent less when prices rose in 2010.
Consumers averaged spending $49,705, in 2011, the highest level since 2008. And they had more to spend, with average incomes last year rising 1.9 percent to $63,685.
All major areas of spending rose last year, with the biggest increase, 8 percent, occuring in transportation, which reflects the high price of oil and gasoline.
The Journal noted that a better gauge of consumer optimism is entertainment spending, which rose 2.7 percent, with spending on clothing and and services rising 2.4 percent. The only areas that saw spending growth in 2010 were health care, whose costs keep rising, and transportation.
Locally, sales-tax revenues for August totaled $23.7 million, which is a 7 percent increase over August 2011, and the second highest monthly collection since Philadelphia adopted the 8 percent sales tax three years ago.
Growing consumer confidence can also be seen in the 5.9 percent increase in housing prices nationally through July of this year. That far exceeds the measly 0.4 percent gain in housing prices during the same period last year, and a 2 percent increase in 2010.
None of this means Americans have stopped worrying about the economy — not with unemployment at an unacceptable 8.1 percent, down from 9.1 percent at this time a year ago. Too many people are still losing their jobs, or being forced to take pay cuts. The candidates won’t stray from the economy as their top topic for too long. Nor should they.