The U.S. Consumer is Alive and WellDecember 18, 2018
The stock market may be in disarray, but the U.S. economy is still one of the strongest.
U.S. GDP increased at a 3.5% annualized rate, according to the U.S. Commerce Department in its second estimate of third quarter GDP growth.
Then, even though job growth fell short of expectations for 198,000 jobs in November 2018, the economy still added another 155,000 jobs. Wage growth is on the upswing.
Consumers are alive and well, too.
In fact, they’ve already stepped up their spending at the start of the 2018 holiday season. For example, retail sales increased 0.2% in November 2018 to a better than expected $513.5 billion.
Year over year, sales are up 4.2%, suggesting the holiday season is off to a strong start.
The number also reinforces the idea that U.S. consumer demand remains healthy and strong, thanks to rising wages labor market gains, and increased consumer confidence. All despite fears of the global trade war and stock market declines.
“Consumers have the capacity and confidence to spend this holiday season,” says National Retail Federation (NRF) Chief Economist, Jack Kleinhenz, as quoted by Logistics Management. “This is a good start to the holiday season and consistent with our outlook. Consumer spending remains solid and clearly provides evidence that the economy is healthy as we head into 2019.”
In the retail sales report, nine of 13 major categories showed increases in November. The non-store category, which includes online shopping, jumped 2.3%, says Bloomberg, the most in a year. Other gains were seen at furniture and home furnishings stores, electronics and appliance vendors and health and personal care stores.
Even better, October 2018 retail sales were raised to 1.1% from 0.8% — another suggestion the U.S. economy got off to a better fourth quarter start than it seemed.
Going forward, the National Retail Federation (NRF) also believes we’ll see a rise of 4.3% to 4.8% in November and December 2018 sales to $717.45 billion to $720.89 billion. “It unquestionably points to a consumer that continues to be upbeat and happy to spend money,” said Ward McCarthy, economist for Jefferies, as quoted by Bloomberg.
In short, despite fears of a slowdown, the economy is just fine, thanks in large part to the U.S. consumer.