Consumer Spending Starting to Increase
Posted on December 11, 2009New figures from the Commerce Department show that retail spending is starting to pick up speed. Consumer purchasing exceeded expectations in November, especially in the auto industry, Bloomberg reports:
The report from the Labor Department showed that the economy lsot 11,000 jobs which is the least number of monthly jobs lost since December, 2007. Of course, the economy needs to create more than 100,000 jobs a month just to keep up with demand for jobs, so when a loss of 11,000 jobs in a month is heralded as "good news" you know the economy is really, really bad. Still, losing 11,000 jobs in a month is better than shedding 50,000.Sales at U.S. retailers rose more than forecast in November, a sign consumer spending is gathering speed heading into 2010. The 1.3 percent increase followed a 1.1 percent gain the prior month that was smaller than previously estimated, Commerce Department figures showed today in Washington. Purchases excluding autos climbed 1.2 percent, also more than anticipated and the biggest gain since January.
Households have kept buying automobiles even after government incentives expired, showing the biggest part of the economy was weathering the worst employment slump in the postwar era. The Obama administration is proposing new initiatives in a bid to create jobs, while Best Buy Inc. is among retailers using discounts to lure budget-conscious holiday shoppers.
"Consumer spending continues to surprise on the upside as the economy moves further away from the end of the recession," Chris Rupkey, chief financial economist at Bank of Tokyo- Mitsubishi UFJ Ltd. In New York, said before the report. "The labor market is showing signs of stabilization and this is giving consumers greater confidence to spend a little more."