Consumer Spending Increases in face of Rising Costs

Posted: Jun. 6th, 2011  |  By JustLuxe Team

The U.S. Dollar has dropped and U.S. economic growth is still hindered. A report shows that American consumer spending is up 0.4 percent, but in the face of rising food and gas prices. This is keeping the interest rates low at the Federal Reserve, and overseas central banks raising their rates. Higher interest rates in other countries are much more attractive to investors.

Consumer spending accounts for 70% of the economy in America, and in the face of halted spending, the news on the horizon for the economy is grim. The housing market is also considering its future, as home sales hit an all time low, putting the recovery of the housing market on hold. Compared to the Swiss currency, the dollar has hit an all time low at 0.8535 Swiss franc. Swiss currency is what investors consider to be a “safe haven”. Reports show the U.S. currency fell to 97.75 Canadian cents.