The consumer is spending more, but much is still going to price increases and categories outside fashion.
Overall, the U.S. economy is not just strong, but surprisingly strong, with the Commerce Department reporting Thursday that third-quarter GDP grew by 4.9 percent from the second quarter, at a seasonally adjusted annual rate.Cult Gaia Reschedules L.A. Fashion Show, Presenting at the Academy Museum
For one, the personal consumption expenditure price index — which tracks the price of both goods and services — was up 2.9 percent. That has inflation accounting for a majority of the overall spending gains. “The increase in consumer spending reflected increases in both services and goods,” said the official GDP report. “Within services, the leading contributors were housing and utilities, health care, financial services and insurance, and food services and accommodations.
Apparel and footwear did its part — contributing 0.12 percentage point to the overall 4.9 percent gain in GDP — but other categories are clearly taking precedence, by need or desire. Mass merchants like Walmart Inc. have been talking about how consumers have pulled back from discretionary purchases like apparel for more than a year.
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