A recent Bloomberg survey of 76 economists found that American households increased spending by the highest amount in the last five months. While holiday discounts and year-end pricing are in effect, and partly responsible for the rise, the data reflected that increases are occurring in product lines not usually found to be a part of seasonal bumps, including: automobiles, furniture, appliances and durable goods. The survey also found that incomes increased 0.2 percent in November, as opposed to dropping 0.1 percent in October. According to Richard Moody, chief economist at Regions Financial Corp. of Birmingham, Ala., “We’re farther along in the restoration of household balance sheets, and that’s turning up in some of the consumer spending numbers.” Proponents of easing the Fed’s stimulus plan are grouping this finding, along with the other subjective data interpretations, to justify the Fed’s reported easing of stimulus in January of next year. We’ll have to see if all of this extra consumer spending, and higher income, has an effect on the markets after the Santa Claus rally runs out of steam.
Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:
Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.
Jon Johnson's philosophy in investing and trading is to take what the market gives you regardless if that is to the upside or downside. For the past 21 years, Jon has helped thousands of clients gain success in the financial markets through his newsletters and education services: