Wednesday, March 11, 2015

Economy: Reality Check - Restaurants & Bars Edition

(Drivebycuriosity) - While surfing on Internet I found the interesting graph above ( You can see that sales at US Restaurants & Bars (red line) have been growing much faster than sales at grocery stores since the early 1990s. And last month Americans spend more money at R&Bs than at groceries.

I think this graph tells us a lot about how the American economy is doing. There is a lot complaining about the alleged shrinking living standards of Americans. But this chart shows otherwise.

Over the recent 20 years expenditures at R&Bs tripled. Spending money at grocery is a necessary, but spending money at R&B is a luxury. So, Americans have been spending more and more money for luxuries - and a larger part of their income, not really a sign for shrinking living standards.

The chart also shows that spending for R&Bs has been accelerating recently. This could be fueled by the strong job market in the recent months which creates more income, another sign that living standards are getting better.

The Wall Street Journal (the original source of the chart) also supposes that the reecent acceleration of R&B expenditures was fueled by cheaper gasoline. But since January gas prices jumped more than 20%, which could induce a slight setback for R&B sales.  I believe that gas prices will fall again in the coming months (driveby). Cheaper gas and a continuing growth of the job market should ensure that the growth of living standards and R&B sales will continue. Enjoy!

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