Americans are opening their wallets, and ready to splurge (mostly on one thing)


‘Have vaccine. Will travel.’ The Schwab’s 2021 Modern Wealth Survey concluded that Americans are dreaming most about traveling (40%) and socializing (30%) and taking a vacation (24%).

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American spending habits are about to get real.

As vaccination rates increase in the U.S., so will people’s willingness to open their wallets. Nearly half (47%) of people polled by Charles Schwab are keen to live large, and get back to the spending levels before the COVID-19 pandemic. What’s more, almost a quarter (24%) say they want to splurge and make up for lost time, the survey, released Wednesday, found.

What’s No. 1? The Schwab’s 2021 Modern Wealth Survey concluded that Americans are dreaming most about traveling (40%) and socializing (30%), taking a vacation (24%), dining out at upmarket restaurant (21%) or throwing a party for family and friends (15%). “Many are starting to see the light at the end of the tunnel,” said Jonathan Craig, head of Investor Services, Charles Schwab.

After more than a year of quarantine and illness, people are ready to exhale. “We’re also seeing a healthy balance — even as many people are eager to get out to spend, they also want to nurture newfound, healthy savings and investing habits developed over the last year, and it seems that will be an ongoing marker of this next chapter,” he said.

There has been a substantial decline in credit-card balances in the first quarter of 2021. “However, surging retail sales volumes suggest that a combination of stimulus checks, increased consumer confidence, and pent-up demand are both supporting consumption and also helping borrowers reduce revolving debt balances,” said Andrew Haughwout, senior vice president at the New York Fed.

‘There are signs of normality, or a new normal, returning.’

People face significant headwinds as they finally break out of isolation, and start feeling more confident about the economy. The economic environment during the coronavirus pandemic strained their finances (31%), while 26% faced a salary cut or reduced hours, and 20% said they were laid off or furloughed, the Charles Schwab survey said.

Many Americans will likely be hit by higher prices if/when their spending gains momentum. Consumer prices rose sharply in April to 4.2% from 2.6% in the prior month — the highest since 2008 — and drove the rate of inflation to the highest level in nearly 13 years, signaling greater stress on the economy as businesses grapple with supply shortages. Exhibit A: used-car prices.

One wrench in Americans’ desire to travel by plane or car: Retail gas prices just topped $3 a gallon for the first time in over 6 years, according to GasBuddy. The national average price for regular unleaded gas was at $3.02 a gallon. Gas prices were already ticking up after the Colonial Pipeline ransomware attack, although that has affected some parts of the country more than others.

What’s more, the recovery reveals two very different Americas. The latest jobs figures showed a stark divide among workers, both in their ability to get jobs and hang onto them during the pandemic. While critics have said Americans are staying home because of enhanced unemployment benefits, the official U.S. unemployment rate rose again in April to 6.1% from 6% the previous month.

Still, there are signs of normality, or a new normal, returning. On Wednesday, Broadway star Patti LuPone said Steven Sondheim’s “Company” was 10 days from opening on Broadway when the show was suspended. It will begin previews on Dec. 20. In a video on Twitter
she said, “Welcome back to Broadway, and when we’re together again it will be one hell of a show.”

The Dow Jones Industrial Average
the S&P 500

 and the Nasdaq

 were all lower Wednesday.

The Moneyist: Is it ethical for cruise lines, venues, schools or Broadway to restrict entry to people not vaccinated against COVID-19?

Source : MTV