Quotes from Capital Economics:- The rise in the University of Michigan’s measure of US consumer confidence from 86.9 in October to an eight-year high of 89.4 in November suggests that the recent strengthening in retail sales growth is here to stay.- It shouldn’t be a surprise that confidence is riding high when job growth is strong, equity prices are back at record highs and gasoline prices are plunging. Both the current conditions and expectations indices of this survey rose to levels not seen before the recession began in late 2006.- At face value, the survey is consistent with annualised consumption growth accelerating from just below 2% in the third quarter to around 4% in the fourth. We don’t place much stock in confidence as a leading indicator of consumption growth. We anticipate that fourth-quarter consumption growth will be nearer 2.5%. Nonetheless, it summarises how the separate forces that influence spending are developing. In that regard, there is little doubt that they are improving just at the time that households start flooding to the malls to begin their holiday shopping.
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