The end of the year is full of holidays along with excessive amounts of spending, but can the economy keep up?
U.S. online shoppers spent around $9.8 billion this Black Friday which is an increase of 7.5% from last year. Although this is good for the economy, it brings up the question: can we keep up? Well, if people save less, then the total capital investment stock will get increasingly worse.
The rise in online shopping began in 2020 along with the pandemic and shows no signs of slowing down as there has been little fluctuation within the statistics. The large boost has affected many companies, especially those who don’t offer an online order option. For example, if a local bakery only sells in stores, their business would be greatly affected by the gloomy threat of closing for good.
With this drastic alteration in retail, there has to be some benefit, right? Well, it allows for shoppers to compare prices and not have to brave the crowds of shopping centers. As for businesses, there is an increased rate of repurchasing as it is more accessible.
It is reported that this rate of spending is unlikely to continue as savings deplete, and it is clear it will eventually collapse. Several economists have hinted to a recession in sight. According to Forbes Advisor, Experts have noted that a recession occurs when there is a large negative increase in spending.
Overall, it is clear the economy will not be able to handle this rise in online shopping. To add to this, most people have several streaming services which eliminates the need for movie theatres. Therefore, their business is also in jeopardy. Although movies are separate from shopping, they have both been thoroughly affected by this drastic shift from in-person to online.
Many students at Berlin contribute; whether it’s watching a movie during lunch or shopping online during study hall, most are guilty. But what can we do to solidify a solid future for our economy?
