U.S. Economy Is Likely To Sizzle This Summer
MARY LOUISE KELLY, HOST:
Today, Memorial Day, marks, among other things, the official start to the summer travel season. And that season could be busy this year with half of all adults in the country now vaccinated and many of us looking forward to a summer vacation from the coronavirus. That is likely to mean more business for restaurants, hotels and entertainment venues this summer. It could also spell long lines and high prices as businesses struggle to keep up with the increased demand. NPR's Scott Horsley has his eye on all the moving parts of this. He's here now.
SCOTT HORSLEY, BYLINE: Good to be with you, Mary Louise.
KELLY: All right. So give us the forecast. What are these next few months going to look like?
HORSLEY: This could be a sizzling summer for the U.S. economy. You know, a lot of Americans who were lucky enough to keep working during the pandemic have squirreled away a lot of money over the last year. And they're eager to make up for lost time doing all the things that were off-limits when the coronavirus was raging.
I spoke to Mindy Williams, who lives in Columbus, Ohio. She has two kids, ages 6 and 10. They didn't get a vacation last summer. Williams told me she was reduced to traveling vicariously by watching British television. So this year, she and the kids are ready to get out of town.
MINDY WILLIAMS: All of our extended family's vaccinated at this point. And we're going to - hope to go to Cedar Point.
HORSLEY: Cedar Point, of course, is that 150-year-old amusement park on the shores of Lake Erie. Williams says her kids are also looking forward to visiting their grandparents.
KELLY: OK. So trips to amusement parks, going to be a lot of family reunions, going to be a lot of road trips, all of which sounds pretty great, I have to say. What is the economic impact of this going to be?
HORSLEY: Well, it's certainly positive. We're starting to see more spending on restaurants and recreation and other services. That more than made up for a small drop we saw in spending on goods last month. We do expect that trend to continue in the months to come.
But just as automakers and sawmills have had challenges keeping up with demand for their products, now the service sector is likely to experience some growing pains. Cedar Point, for example, is actually closing on Tuesdays and Wednesdays for the next few weeks as they struggle to find enough workers. Mindy Williams is bracing for that.
WILLIAMS: They usually have a lot of international help, but this year, I guess that's not happening yet. So hopefully, we'll be able to go and it won't be like, stand in a line for an hour for this roller coaster and then an hour for this one (laughter), that sort of thing.
HORSLEY: There could be some longer waits at restaurants this summer. Airplanes are going to be more crowded. And you're probably going to have to pay more to get a rental car.
KELLY: Yeah, I have noticed that. I was just trying to book one. It was really expensive. What is happening more broadly with inflation?
HORSLEY: Prices are climbing thanks to increased demand as well as some bottlenecks in supply. The inflation yardstick that the Federal Reserve pays most attention to rose 3.6% for the 12 months ending in April. Now, that's a little bit exaggerated because prices last April were artificially low during the pandemic, but there are certainly upward pressure on prices. You see that at the gas pump. You see it at the airline ticket counter. You continue to see it at Home Depot. Jane Wiesner, who lives in Tecumseh, Mich., told me the high price of lumber forced her to downsize some of her home improvement plans this summer.
JANE WIESNER: I was in the market for redoing my deck and ended up just power washing it. It just seemed to be too much to try and demo the whole deck.
HORSLEY: Both the Biden administration and the Federal Reserve say the jump in inflation is likely to be temporary, but it could continue through the end of this year.
KELLY: And how's the job market doing?
HORSLEY: Well, we'll get another job report on Friday. It's going to be closely watched after the lackluster job gains in April. Wiesner actually has a son who works for a brewpub and a daughter who works for a hotel. They had a tough time during the pandemic, but she says both kids expect to be busy this summer.
WIESNER: There's going to be a bit of a burst because people are so ready to get out and do some more traveling. So both the kids have landed back on their feet, took some lumps along the way, but are doing quite well now.
HORSLEY: And that's kind of the story for the broader economy.
KELLY: All right. Thank you, Scott.
HORSLEY: You're welcome.
KELLY: NPR's Scott Horsley.
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