Current Economic Essay Example | Topics and Well Written Essays - 500 words

Current Economic - Essay Example According to Aversa, May â€Å"was the second month in a row that consumer spending went up by 0.5 percent.† This is a trend showing that May was not merely a fluke, and this could be the start of a sustainable trend. Further supporting that hypothesis was the fact that incomes also rebounded in May. As Aversa asserts, incomes are â€Å"the fuel for future spending.† Thus, it is a reasonable assumption that we could see continued strong performance on this leading economic indicator. Aversa also mentions in her article that construction spending also increased in May by nearly a full percentage point. This increase in construction spending was â€Å"the biggest gain in nearly 1  ½ years,† and was fueled by â€Å"Brisk spending on big government projects, such as hospitals and other health care facilities, and by private builders on commercial construction, such as office buildings, eclipsed continued weakness in the housing sector.† The combined increases in consumer and construction spending arguably illustrate broad economic strength in both the commercial and personal consumer areas leading into the summer months. This article speaks directly to a couple of very fundamental economic indicators. While it is mostly a litany of facts about the state of economic performance in May, the article alludes to the power of incomes and spending to produce a strong economy. Spending, both consumer and commercial, quickly reverberates to other areas of the economy. Without strong consumer and other spending, it is difficult for other factors of economic health to take hold. Manufacturing and production will only result in large idle inventories if spending is low. That means fewer jobs as companies seek to slash there supplies in response to lower demand, and in doing so reduce their overhead costs including employment. On the other hand, strong consumer spending translates into increased manufacturing of supply, which in turn leads to greater hiring and lower