David Brancaccio: Today we’ve posed the question: What is the consumer’s role in the economic recovery? Should we be spending or saving? Well, that probably depends on the condition of your finances, right? Although, we’re in a recession, some people still have the money to spend. And data on this subject suggest some folks are doing just that.
But commentator Rob Walker says, in order to really understand the consumers role in the economic recovery, we need to better understand just who the consumer is.
Rob Walker: What do you, me, Warren Buffett and millions of unemployed Americans have in common? We’re all consumers — meaning we all exchange money for goods and services.
So all those reports of “consumers cutting back” or “the consumer’s recession mentality” are about us. All of us. You, me… and Warren. Maybe that’s why those reports are so hard to understand. One says sales of stoves have fallen; another says sales of TVs have risen. One story suggests that even dollar stores are feeling the pinch. Another marvels that Apple, thanks to booming sales of top-end phones and computer tablets, has more cash than the U.S. government. One day we hear luxury goods are selling well; the next that Americans are cutting back on “discretionary services.”
Hold on — isn’t luxury discretionary? Of course it is. But according to the Federal Reserve, education and insurance are discretionary services too, along with dinner and a movie.
Confused? You’re not alone. Every month, economists struggle to parse consumer consumption numbers. What we need are more precise methods of assessing spending data. Methods that acknowledge that there is more than one flavor of “the consumer.” Pundits and policy wonks have all acknowledged that anyone wanting to diagnose the economy has to get specific. Take labor: People studying American workers use the terms “blue collar” and “white collar.” They’re relatively crude distinctions, but they’re indispensable to any analysis. Anyone comparing income trends can see that Warren Buffet and his peers have had very different experiences from most of us.
So why haven’t the experts come up with distinctions for consumers? Every day we hear how important consumers are to our economic recovery. But if we want to figure out what’s going on with consumers, what we want consumers to be doing and which policies might help, we need to find some way to answer a basic question: Which consumers, exactly, are we talking about?
Brancaccio: Rob Walker is a contributing writer for Design Observer and the New York Times Magazine.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.