As omicron cases diminish and states loosen covid restrictions, Americans are preparing to spend big again.
Travel agents, hotel operators and restaurants say they have seen a spike in demand in the past week, following a drop in daily U.S. coronaviruses cases. People are booking vacations. They are spending a lot on Disney vacations, private tours of Hawaii and cruises to Antarctica.
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The reality has been more uncertain and filled with fits and starts than it was earlier in the crisis. Many say that has given them a sense of urgency to lock in revenge travel before it gets out of hand. Families are holding their breath and booking even though the FDA has delayed a decision on a vaccine for children under 5.
Mark Matthews, marketing manager for Maui Seasons, a private tour company in Hawaii where bookings are up 65 percent so far this year, said that people really want to make sure they travel while they can. Everything is not known.
Consumers rush out after each coronaviruses wave, eager to spend their money on flights, hotels, amusement parks and other services they had forgone.
The surge in spending was most visible last summer when households were encouraged by a lull in coronavirus infections. Economists say the rebound still provides a notable boost to the economy.
The expected burst of spending comes just as the Federal Reserve prepares to raise interest rates to slow inflation, which is seen as unsustainable. The Fed says the biggest threat to the economic expansion is the rising prices.
A new wave of spending could further complicate the Fed's plans while also raising broader questions about whether restaurants, hotels and airlines will be able to staff up in time to meet demand. Wage growth outpaced inflation in the leisure and hospitality sector last year, making it the only sector where wage growth outpaced inflation.
It remains to be seen how widespread a spring spending boom will be. There are no government checks or child tax credit payments in this reopening surge. Wage growth has been overshadowed by inflation as the economy continues to add jobs.
Spending has already been very strong and I expect things to bounce back.
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