Consumer Spending Rises

Good News – Bad News – that seems to be the cycle over the past six months. Jobs are up but the numbers are suspect, Inflation is in check, but milk is $4 and gas is over $3, and now spending is up, but it is on borrowed money.

Income rose by 0.4% in November. That is a healthy clip. Spending also rose in November – 1.1%. So either consumers saved in September and October to buy in November or they are using credit. The former isn’t a bad deal, but the latter is terrible, especially considering the overall economy being teetering on a recession.

Consumer spending does make up a large chunk of the GDP, causing analysts have revised their predictions, but I think it is just delaying the inevitable. Until something dislodges the log jam that is the US economy (jobs, housing, markets, or whatever) we will see no real economic growth for the middle class.