As discussed earlier, it was an abysmal quarter for the US, pressured by what is traditionally the strongest segment of the economy, responsible for 70% of GDP growth: US consumer spending. At 0.23% annualized, this was the worst print going back to 2009.
But that doesn’t mean that Americans stopped spending completely, quite the contrary. According to the BEA’s “goalseeked” models, even as retail sales tumbled, as Obamacare continued to drain disposable income away from other discretionary purchases, Americans – who spent far less on cars, clothing and housing in the first quarter than in Q4 – were scrambling to buy… recreational vehicles!?
Incidentally, this won’t be the first time Americans splurged on RVs. The last time they did this? Exactly one year ago.
To be sure, the ongoing surge in RV purchases sure would explain why the housing recovery, overdue by about 5 years, still fails to materialize.
And another observation: if it wasn’t for spending on RVs, consumption would have posted its first contraction since the financial crisis.
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