Just Don't Expect "Pent-up Demand" from Consumers. Here's Why

[marmar]

Just Don’t Expect “Pent-up Demand” from Consumers. Here’s Why
by Wolf Richter • Feb 26, 2021 •

Free money whipped consumers into a rollicking eight-month splurge on goods. There’s nothing “pent up.” And services are not a shoo-in for “pent-up demand.”
By Wolf Richter for WOLF STREET.


Give Americans some free money, and tell them it’s their duty to buy some stuff with it, preferable stuff imported from other countries, and they’ll buy some stuff with it, big and expensive stuff too, and they did buy a lot of stuff with it, more than they’d ever bought before, and their homes are full of stuff they bought in this eight-month long record rollicking free-money spending spree.

And it happened again in January: Free money from the stimulus payments kicked in and consumers further boosted their spending on goods from already high levels.

....(snip)....

Demand for consumer goods wasn’t “pent up.” It was all let out.

This time around, households didn’t go through two years of cutting back on goods purchases, as they’d done during the Financial Crisis.

This time around, there is a shortage of supply, including the now infamous semiconductor shortage, due to the surge in spending on goods, and inventories are tight, amid production snags and supply-chain problems. And given this demand, and the supply issues, prices of goods are rising.

Consumers have been awash with this money they didn’t need to work for. And they paid down credit card debts with it. And they spent part of it on goods. ..........(more)

https://wolfstreet.com/2021/02/26/just-dont-expect-pent-up-demand-from-consumers-heres-why/

[intrepidity]

1. My car has a "pent-up" need for tires

that hopefully can be met soon.

[Backseat Driver]

4. My car needs expensive service too,

but old "Dorothy" desperately wants to be a running vintage car, lol - her body is still beautiful! She's all I need to run the nearby errands; I'm the one with the stay-at-home "pent up" desire!

Especially since the 'puter died last week, ALWAYS SOMETHING - Time or money - can't have both at the same time as you age out - I'm so grateful to be stimulated with the money! Got #2 Pfizer today; we were always as compliant as we could and have been lucky in our health, so yeah, pent up desire to fix what broke, keep small local community food joints and services afloat, help my kids, donate to get Joe into the WH, and pay back small loans.

I feel no guilt about not flinging the stimuli back into the universe! I surely did.

[LearnedHand]

2. I typically like Richter's reports

But his snide, repeated use of the term “free money” in this one makes my blood boil. None of that stimulus money is “free,” dammit. They always magick up credits from an upcoming year’s income taxes to create a stimulus. Any way you look at it, it’s money we’ve already paid or will pay.

[mobeau69]

3. Sounds like QOP BS to me. nt

[Midnight Writer]

5. I know a lot of folks who have grown accustomed to not going shopping, not eating out.

They have learned to enjoy cooking their own meals and relaxing at home.

To me, it is stress relieving.

[Still Sensible]

6. There might be some with this POV, but

I believe you will see plenty of pent up demand. JMHO

[Laelth]

7. Complete crap. n/t

-Laelth

[rickyhall]

8. 40 years of piss poor wages