Please respond to my two classmate’s discussion posts below. Please include in-t
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Please respond to my two classmate’s discussion posts below. Please include in-text citations and a reference list for each post
Post 1.
Johnnie Squires
RE: Week 10 Discussion
The article I read was How Will Consumer Behavior Change in 2023?
https://www.forbes.com/sites/forrester/2022/11/03/…
The article suggests ways that consumer behavior will change in 2023. Understanding consumer behavior is crucial for any business. Consumers are expected to continue spending in 2023. However, they are expected to seek fewer and richer experiences that combine the digital fluidity of the pandemic (Forrester, 1). Spending is expected to increase. Many consumers saved during the pandemic and will continue to save throughout the year. While many consumers are anxious about the possibility of a recession, they will be cautious that having money saved will stimulate them to spend more.
The pandemic forced consumers to change their living, shopping, and interactive behaviors. Post-pandemic behavior will regress, and consumers will revert to their old spending habits, but they will optimize the experience. In 2023, consumers are more likely to choose the quality of the experience and purchases over quantity. Consumers are more likely to choose options that are of value as opposed to those that are not.
How do you think this area of economics might change in the future?
In my opinion, consumers will continue to live by the less is more throughout 2023-2024. Many consumers will continue to manage finances and purchase things as needed. Some consumers may concentrate more on getting out of debt or saving than spending on more luxury items.
What impact would those changes have on the U.S. economy (or, if you are an international student, on your home country’s economy)?
When consumer spending is high, it helps the economy sustain its expansion. When consumer spending declines, it affects business sales. The decline in sales forces reduces labor and production. A long-term effect of the declination would lead to the economy slowing down and possibly entering into a recession.
Would those changes directly affect your company or workplace? Why or why not?
If consumer confidence and spending decline, consumers are less likely to purchase homes.
Reference:
Forrester. December 5, 2022. How Will Consumer Behavior Change In 2023? https://www.forbes.com/sites/forrester/2022/11/03/…
Post 2.
Cole Paler
RE: Week 10 Discussion
Provide a link or reference to the article
https://www.wsj.com/articles/inflation-consumer-sp…
Briefly summarize the key points of the article
“Households are heading into the holiday season in fairly good shape” (Torry, 1). As the holidays begin, consumer spending has increased the most it has since June 2022. The numbers were adjusted by .5% for inflation as it remained high. The Fed wanted to raise interest rates to bring down inflation; however, “Strength in consumer spending makes it harder for the Fed to achieve a “soft landing”—a reduction in inflation with slower growth but no recession” (Torry, 1). To add more confusion around a decision, waged and household income rose slightly to .7% in October due to pay increases and one-time refundable tax credits.
How do you think this area of economics might change in the future?
Like so many other times in economic history, inflation has increased, followed by a decrease. However, “Standard economic theory states that inflation will get out of control under a prolonged mix of certain monetary and fiscal policies, but whether inflation will persist toward that end warrants further examination. The answer depends both on the distribution of shocks to the economy and how central banks (and finance ministries) react” (Agarwal, 2).
Consumer spending will also change as generations begin to grow. An article in Seeking Alpha suggests that “Companies that became fat and happy catering to Boomer demand from 1980 to 2000 need to understand that in many cases this demand is no longer there. Why? Because the generational landscape has changed and will continue to change between now and 2025” (Beacon Asset Managers, 3). Boomer consumer demand will decrease slightly, and Generation Y will increase drastically due to the decline and growth of the respective generations. Companies need to stay ahead and learn to cater to a new generation.
What impact would those changes have on the U.S. economy (or, if you are an international student, on your home country’s economy)?
According to Ruchir Agarwal and Miles, Kimball, there are five key drivers of an inflation surge. These drivers include Supply Chain bottlenecks, a shift in demand towards goods and away from services, aggregate stimulus, post-pandemic recovery, a shock to the labor force, and a supply shock to energy and food because of the war in Ukraine. All drivers listed would have an impact on the U.S. economy. They are all related in some way. We have already seen how the supply chain affected the country where prices increased on goods because of a lack of supply. When inflation is high and services prices rise, there is a shift away from the services; whether people do them themselves or put the job on hold until prices decrease. “Much of the rise in inflation in the near term reflected inflation in durable goods (including used cars), while service inflation increased only moderately” (Agarwal, 2). As for the labor supply, “even under optimistic COVID-19 outcomes, the majority of the employment shortfall will likely persist moving forward” and “contribute significantly to inflationary pressure in the United States for some time to come” due to higher wages pushing up costs” (Agarwal, 2).
Would those changes directly affect your company or workplace? Why or why not?
I do not believe so. My company is actively hiring, promoting, giving raises, etc. They have not let the onset recession affect how they treat employees. Although it is not our primary product/service, we are seeing more customers buy the technology (good) over the service.
References:
Harriet Torry. Dec 2, 2022. Consumer Spending Jumped in October as Inflation Eased. W.S.J.
Ruchir Agarwal, Miles Kimball. June 2022. Will Inflation Remain High? International Monetary Fund. https://www.imf.org/en/Publications/fandd/issues/2022/03/Future-of-inflation-partI-Agarwal-kimball#:~:text=Standard%20economic%20theory%20states%20that%20inflation%20will%20get,and%20how%20central%20banks%20%28and%20finance%20ministries%29%20react.
Beacon Asset Managers. October 2022. The Future of U.S.U.S. Consumer Spending: It’s a Generational Thing. Seeking Alpha. https://seekingalpha.com/article/168342-the-future…
