American Consumer Spending Increases
Whilst the rise in consumer spending is encouraging, the rate of increase (from a low base) remains disappointing. Demand drives the employment cycle, so if consumer demand is subdued, the prospects for new jobs remain bleak. The other side of this coin is that if consumers are afraid that their own jobs are insecure, they will try to cut back on spending to preserve whatever cash they have to tide them over whilst they are looking for a new job. This, of course, suppresses demand.
New data shows that the sale of new homes has risen by 5.5% in November; again, whilst this is good news, it must be set in context.