People earn, spend more in May
Many business owners are hesitant to invest in new technology that will help them improve backroom processes, especially with memories of the economic downturn still fresh in their minds. But new reports indicate retailers may be able to set their fears aside for the time being, as shoppers are earning and spending more now than they have in recent months.
Spending on the rise in May
According to newly released data from the Commerce Department, consumer spending shot up 0.3 percent in May, thanks to a heightened demand for various goods and services. The growth was consistent with predictions from experts, but still came as a surprise to many merchants. This jump is a significant turnaround from April's numbers, which revealed a 0.3 percent drop in spending that had small-business owners throughout the country worried about profits and the future of their sales.
While higher summer gas prices were attributed to some of the leap in spending, that wasn't the only reason sales were up - shoppers also ate outside the home more frequently and spent more on housing, recreation and consumer goods.
Incomes also higher
People may be spending more because they're more comfortable in their current financial situations. MarketWatch reported that in May incomes jumped a seasonally adjusted 0.5 percent, and wages, investment incomes and entitlement payments all rose.
Higher wages could be attributed to the number of Americans finding new jobs or better paying careers. The Labor Department reported initial claims for unemployment benefits dropped by 9,000, to a seasonally adjusted 346,000. The four-week moving average for new claims also dropped by 2,750.
"It appears that the underlying pace of layoffs remained stable during June," said Guy Berger, an economist at RBS, according to Reuters. "The other half of the employment equation, hiring, also likely held steady."
Business owners need to prepare
As spending improves and more people head back to work, retailers need to prepare for any potential spike in spending. By investing in a dual purpose cash and check scanner, small-business owners can better manage the increasing number of transactions they process, saving time and better serving customers. By looking to new technology, such as remote deposit capture, internal processes can be improved and a company will find itself in a better position to grow and enjoy continued success.