High growth thanks to America's shopping superheroes and Taylor Swift's tour

Who are the most powerful superheroes right now? They are America's consumers and their superpower is shopping. The USA recorded economic growth of almost five percent in the last quarter, the strongest growth since 2021. In comparison, the German economy shrank in the same period. High inflation, dysfunction in Washington D.C. and geopolitical concerns don't seem to be slowing U.S. consumers. In September, spending growth rose to 0.7 percent, above economists' forecasts. Many economic analysts had expected a recession. Taylor Swift is also one reason for the growth. Her tour attracted thousands of fans who spent money on flights, hotels and restaurants. The higher prices have not deterred consumers so far. However, the savings rate is falling and private debt is rising. A possible recession in the USA would also have an impact on the global economy, including Germany.

Taylor Swift as a growth engine

Taylor Swift's Eras concert tour had a positive economic impact of over ten billion dollars. Direct spending by fans in the tour's 20 cities totaled $5 billion. Heads of state from all over the world are interested in Swift planning a tour to their countries.

The strong labor market as support

A key reason why U.S. consumers are able to withstand the expected downturn is the labor market remains strong. In August there were 9.6 million job vacancies and 6.4 million job seekers. The unemployment rate is historically low at 3.8 percent. 336,000 new jobs were created in September. The bargaining power of workers is strong, which leads to rising wages. After wage and salary increases were previously eaten up by inflation, they have now overtaken it.

The question, however, is whether the shopping superheroes will remain invulnerable. The savings rate is falling and private debt is rising. Outstanding credit card debt now exceeds a trillion dollars. A warning signal comes from the toy industry, where companies are warning of weaker Christmas sales. A recession in the USA would also have an impact on Germany and the rest of the world.

Source: www.zeit.de