The overall spending by U.S. consumer gathered momentum during the month of November as the household owners bought electronics, furniture, and similar goods. This further reduces the fears of a major slowdown of the American economy. But when an overall outlook is obtained for the same, the picture still continues to darken with time.
This upbeat data acquired from Commerce Department dated Friday strengthened the expectations that Federal Reserve shall raise the interest rates this year for the 4th time during the policy meeting for December 18-19. This is despite the moderating inflation along with tighter conditions of the financial market.
This also showcased a stark contrast when compared to the reports by China stating a stringent fall-off for the retail sales of the 2nd largest economy of the world. This was even in contrast with Europe where the key measures for business activities actually expanded and a fairly slow rate for 4 years. The Central Bank of U.S. has hiked its interest rates about 3 times just this year.
Chris Rupkey, the chief economist working at MUFG, New York mentioned that the reports brought out today suggest the Fed officials that the customers aren’t just confident, they are also keeping the money where needed and purchasing goods, enough to allow the economy to hum. The retail sales minus the sales for gasoline, building materials, automobiles, and the food services surged by a mark of 0.9 percent the previous month. This was just after an upward revise of 0.7 percent in the month of October.
These retail sales that correspond fairly close to the consumer spending part of the overall domestic product were actually reported in October to have acquired about a 0.3 percent rise. The economist poll organized by Reuters forecasted about 0.4 percent rise in sales last month. The increase for sales in core retail seen in the month of November with October’s data’s upward revisions suggest that there was a brisk pacing up of the consumer spending during the 4th quarter. Consumer spending is a fraction of the economy that accounts for close to 2/3rd of the same. This increased at the annualized rate of 3.6 percent during the quarter of July-September.
The Reuters poll that was released dated Thursday showed the economists that there is a probable risk from recession to occur anytime in the upcoming two years. This will be a surge to 40 percent which is up from the 35 percent mark last month.