Posted on 12/22/2007 12:45:45 AM PST by JohnHuang2
Consumers put aside worries about slumping home sales and soaring gasoline prices and headed to the malls last month, pushing spending up by the largest amount in 3½ years. The better-than-expected surge lessened fears of an imminent recession.
The Commerce Department reported yesterday that consumer spending shot up 1.1 percent last month, nearly triple October's gain. It was the biggest one-month jump since a 1.2 percent rise in May 2004 and was significantly higher than the 0.7 percent gain analysts had expected.
Incomes were also up last month, but the 0.4 percent increase was far below the rise in spending. Consequently, the personal savings rate dipped back into negative territory as households spent savings and borrowed to finance November purchases.
Analysts attributed part of the spending to heavy discounting and longer store hours at the start of the holiday season by retailers worried that the all-important Christmas shopping period may not be as strong this year given the factors weighing on the economy.
Still, the strong November relieved some concerns that a recession might be looming.
"Consumers did their part in November, but we will see whether they are up to it for the full Christmas season and into next year," said Mark Zandi, chief economist at Moody's Economy.com. "Their financial firepower is fading due to the weaker job market, surging gasoline and food prices which cut into their purchasing power and the evaporating housing market."
(Excerpt) Read more at washingtontimes.com ...
too bad the increased spending is due to higher prices and inflation rather than a happy go luck consumer. I also think it is suspect that the american consumer is rooted on by the media and the government to go spend as much as possible during christmas. Yeah, we spent way more than we should have already!
Rush called this today.
The scumbags of the dying, socialist Democrat “mainstream” newsrooms absolutely cannot tolerate a booming economy. Rush said that they would quickly find a way to spin increased Christmas spending as bad, just as surely as they would have spun decreased Christmas spending as bad, and a sure sign of a faltering economy.
Rush, as usual, was right on the money.
Regardless, count on somebody to spin it bad, real soon.
Yep, we'll have more reports of growth "better than expected", profit reports "higher than expected", new jobless claims "lower than expected", core inflation "lower than expected", ad nauseam.
Sure. Sure. But it says right here they spent it on flipped hamburgers...
What do you think?
Good. I own MCD.
socialist Democrat “mainstream” newsrooms
Getting to be like the former President Clinton, everybody wonders what they are really lying about.
Yeah, a lot of folks did. While personal income did rise, the increase in spending was way more - it puts the saving rate below zero again - meaning borrowing occurred to finance the uptick in spending :(
Then the next day, "Retailers feeling pinch of subprime fallout"
worries about slumping home sales
A ‘buyers market’, nothing wrong with that, can’t be a seller’s market everyday.
No talk of any sort of recession last year at this time for the dims hadn't had time to completely foul up America's robust economy!
American are seething to begin impeachment of Reid and Pelosi, it appears...
The 50% off and more sales that fill today’s papers kind of blows your argument away... the consumer gets more than his money’s worth this Christmas.
LLS
Unforutnatley, the way "savings" is measured is in no way reflective of reality. I put 10% of my pay in a 401(k) every week, my wife the same. Not a penny of that is considered "savings" in the governments calculation. Nor are a variety of other financial instruments that people put money in. And they should use these over "savings" accounts.
IIRC, the government only considers passbook savings as *savings*. Perhaps all this means is that people park their holiday money in short term bank accounts or perhaps they are even referencing Christmas Club accounts. It is possible that many gifts were purchased with credit cards, but no discussion of how many people pay off their cards each month.
We put short term savings into a credit union account. Long term savings are in investment accounts or savings vehicles that pay more than a tiny amount of interest.
There have been many informed comments on this site regarding the way savings are calculated. The conclusions have been that the government figures are skewed and do not reflect reality.
FWIW, my business Christmas sales from my web site were about 80% debit card sales. Gift certificates for our service business were about 85% cash or check. Those who paid by card are people we know pay off their cards every month and use their points to finance vacations and air travel.
Some of this *data* is not much better than anecdotal, IMO.
I suppose this is another example of misinformation from the MSM. Thanks for the correction -
What all does "count" in savings? Just passbook savings?
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