Time and time again, US consumers have proven themselves a resilient lot. November data add to the evidence. From MarketWatch:
Consumers spent with abandon in November for a broad array of goods and services, the government's data showed.
Nominal consumer spending increased 1.1%, the most in two and a half years, after an upwardly revised 0.4% gain in October. Economists had been expecting November's spending to rise 0.9%.
Income has been less resilient especially after adjusting for inflation.
Nominal incomes rose 0.4% after increasing by 0.2% in October...
After taking out taxes and adjusting for the spike in inflation, real disposable incomes fell 0.3%, the second decline in a row and the fourth decline this year...
Inflation in November was mostly in energy.
Core inflation increased 0.2% for the month, less than the 0.3% gain that had been expected, but the year-over-year gain accelerated to 2.2%, the highest such comparison since March and well above the Federal Reserve's target rate of 1% to 2%.
Headline inflation, which includes food and energy costs, jumped 0.6% in November, the biggest rise since Hurricane Katrina pushed gasoline prices up. Gasoline prices surged 9.3% in November, but have declined modestly since.
In another piece of positive news on the consumer front, MarketWatch reports that consumer sentiment has crept up.
Consumer sentiment strengthened in late December but remained at two-year lows, according to media reports Friday of proprietary research from the University of Michigan and Reuters.
The UMich consumer sentiment index rose to 75.5 points in late December from 74.5 earlier in the month. Economists were expecting the index to hold steady.
And while the Economic Cycle Research Institute's Weekly Leading Index fell to 136.2 last week from a downwardly revised 137.9 in the prior week and its growth rate fell to minus 4.8 percent from minus 3.9 percent, there appears to be some hope that the threat from a credit crunch is easing.
Certainly, market fears of a recession receded yesterday, with stocks rising and Treasuries falling.