There continue to be signs that the US economy is strong, most recently from the financial company S&P Global, which has issued a new report saying business activity during the month of August is growing at its fastest pace in more than four years.
The S&P Global Composite Purchasing Managers’ Index for August indicates American business is booming with output from manufacturing continuing to expand, while emphasis in the economy is shifting to the service sector.
That portion of the economy has been a little weak lately but is seeing higher staffing levels recently, along with less pressure to raise prices and a higher confidence in the market from owners and managers.
The concern is not so much about today’s economy — Lone Star College Associate Professor of Economics Dr. Hank Lewis says an increasingly-squeezed American consumer is of growing concern.
“Prices are so expensive for the stuff people need to live that they can’t spend on extra things, this is going to lead to a drop in spending, and this is going to send us down the business cycle during the coming months into the next year,” he says.
“Millions and millions of rank-and-file consumer who have to spend the bulk of their income on just living, are having to spend more of it on just surviving and less and less on other things is taking away from other industries.”
Then there’s “some of the stuff that’s going on with data centers keeping the price of electricity higher, some of the stress that’s been on fresh water that’s used for drinking and supplying agriculture are becoming high enough that it’s causing the cost of living, food, water, housing, has continued to rise.”
It’s important to keep watch on future problems because it helps us keep our perspective on today.
For instance, we might not have been as worried as much about out-of-control inflation if we’d known that the huge 17-percent increase in consumer prices between the month President Joe Biden took office and November 2023 would only be temporary.