Covid sparks YOLO spending

Personal savings rates hit lows not seen since the Great Recession. But that is not deterring Americans from spending on things that give them pleasure, diving headfirst into a new mantra: YOLO and prioritizing experiences over material possessions.

Experts attribute this surge to a collective desire for life post-pandemic.

According to data from the Bureau of Economic Analysis, spending on international travel and live entertainment events like Beyonce’s Renaissance World Tour and Taylor Swift’s Eras Tour skyrocketed ~30% in the last five years, outpacing overall expenditure growth by fivefold.

This surge doesn't show any signs of slowing down in 2024. February alone saw consumers spend an eye-popping $145.5 billion more than in January, primarily on services.

Live Nation reported a record $23 billion in sales last year, with expectations soaring even higher for this year.

And it's not just entertainment—the travel industry is roaring back to life. A near-record 22% of Americans are gearing up for foreign vacations in the next six months, double the pre-pandemic levels, per the Transportation Security Administration.

Experts believe increased savings in 2021 and 2022 and higher wages after the pandemic are the reasons behind the current consumer spending habits.

But, people are spending even if they don’t have the money. Since 2021, credit card debts have increased 22% and buy now, pay later services are a hit.

Increased spending helped push economic growth up 3.4% in the second half of 2023. Some economists believe the same growth will continue in 2024.