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Consumption refers to the process of utilizing products and the trend can be linear or autonomous. Autonomous refers to the function where the demand remains even, in the condition when the income is zero.
Income cannot be directly related to consumption as people can keep the extra income as savings for future use, whereas, in terms of trade, investment is similar to consumption but it means the accumulation of capital goods, which can contribute towards long term earnings and growth in monetary investment and what is consumption.
Consumption may not provide monetary gains. It plays a significant role in the sustenance of an economy. It is related to income where a direct correlation exists with the income that is considered to be a variable in the microeconomic theory.
In the last year, consumption was one of the key factors responsible for growth in China where the country has been trying to unleash its potential as it contributed 60.5% of the growth in the phase from January to September where the service consumption accounted for 50.6% of the final consumption of the residents.
Consumer confidence is the term used to identify the economy’s strength. Higher consumer confidence shows optimistic investment behavior and positive growth. Many factors can affect behavior like household wealth.
If the wages are growing, the buyer will spend more but if the real wages are not growing or when the inflation is high, or when the worker is facing higher level of personal debts, or when the consumer is vulnerable to changes in interest rates or conditions when the economy is not growing or there is chance of getting lower growth in wages, or in conditions when the market is facing crisis or risk of recession, buyer will save money and not spend.
Even in conditions, when the unemployment levels are declining, if the number of new job creation is not supportive, a kind of uncertainty persists.
Most depressing economic news can lower confidence and investment trends. The global factors like trade war disagreement, political/economic changes, and terrors/geopolitical risk factors like the Brexit deal, climatic risks, and currency factors can create negativity in the markets.
Recent economy energy reviews find the global crude consumption accelerated since mid-year.
The prices were low in mid-year and the demand grew, but the utilization grew consistently and this resulted in a slump in the auto sales in China – resulting in a slowdown in the economy.
The fuel distributors in the country have taken advantage of the boost in the type of fuels held at depots as the prices grew.
Crude demand continued to increase in the 18 top consumer countries where more than 1m barrel of oil is consumed in one day and a growth of 1.6 percent was reported in the last quarter in 2019. Last quarter's growth was one of the fastest since the start of the year. The highest growth was reported in China, while, in the top 17 nations the demand was low by 0.9 percent in the last quarter.
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