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CHART OF THE DAY: The American Consumer Is Just Crushing It
Topic Started: 24 Dec 2013, 08:03 AM (1,914 Views)
peter fraser
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CHART OF THE DAY: The American Consumer Is Just Crushing It
Sam Ro
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The U.S. economic recovery story just keeps getting more exciting.

Last Friday, we learned that GDP grew at a 4.1% rate in Q3.

Today, we got confirmation that growth continues to be robust in Q4.

Personal spending grew 0.5% in November, and October’s growth rate was revised up to 0.4% from an earlier reading of 0.5%.

“Today’s personal income data shows consumers bought a proverbial ton of services from companies in October and November,” said Bank of Tokyo-Mitsubishi’s Chris Rupkey. “This means, hang on to your hats, and please check my maths, real consumer spending is running 3.6% in the fourth quarter of 2013. It has not run this fast since way back in 2010. Consumers are spending more now than they did in 2011 and 2012 when Obama and the Republicans gave them a payroll tax holiday, cutting the tax rate from 6.2 to 4.2 per cent for two years.”

“Current quarter real GDP growth looks to be running near 4%,” tweeted Deutsche Bank’s Joe LaVorgna after the report. “No wonder the unemployment rate is dropping so fast.”

However, that same report showed that core PCE, which is the Federal Reserve’s preferred measure of inflation, is up just 1.1% year-over-year. This is well below the Fed’s long-term target of 2%.

“Economics is going to have a new puzzle to contemplate,” said Rupkey.

Indeed, the story used to be that the economy was growing to slowly and that too much stimulus risked inflation.

Nowadays, we’re talking about the economy getting stronger, yet prices can’t seem to get off the ground.

“While the likely rebound in consumer spending in Q4, the previous recuperation of income, and recent solid employment gains will provide policymakers with encouragement that the household sector is gaining strength, the continued softness of PCE inflation will provide reason for caution,” said Barclays Michael Gapen.

Still, the resilience of the American consumer is something worth celebrating.

“Net net, consumers are spending at the fastest rate this quarter than any time since 2010,” reiterated Rupkey. “That should tell you something. Washington headwinds of uncertainty? Forget about it. With numbers like these, 2014 is shaping up to be the better tomorrow we have wanted to see ever since the recession ended almost five years ago. Bet on it.”

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Any expressed market opinion is my own and is not to be taken as financial advice
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Dr Watson
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Nobody could accuse you of being a slouch, Peter.
The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt — Bertrand Russell
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peter fraser
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Dr Watson
24 Dec 2013, 08:40 AM
Nobody could accuse you of being a slouch, Peter.
Well I've never been a pessimist. I've watched too many pessimists lose their money, and I've watched the more courageous make fortunes. It's luck but they are playing with the house on their side if you get my drift. Central banks encourage people having a go and punish those who hoard money. They are the rules that I have noted over some decades.

But still I didn't write that, and I've found that there is a core of people who have been more consistently correct than wrong.
Any expressed market opinion is my own and is not to be taken as financial advice
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MMM
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peter fraser
24 Dec 2013, 08:51 AM
Well I've never been a pessimist. I've watched too many pessimists lose their money, and I've watched the more courageous make fortunes. It's luck but they are playing with the house on their side if you get my drift. Central banks encourage people having a go and punish those who hoard money. They are the rules that I have noted over some decades.

But still I didn't write that, and I've found that there is a core of people who have been more consistently correct than wrong.
They are the rules that have destroyed their.economy. borrow.more and more and more credit .

Look at the BS in your article, they actually used the words ' real gdp', With all that stimulus thrown in , this is NOT REAL GDP.


This is the REAL state of the economy below, not some BS fed induced artificial gdp figure. Look at what happening on the ground.

http://www.zerohedge.com/news/2013-12-16/camden-new-jersey-one-hundreds-us-cities-are-turning-rotting-decaying-hellholes

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Count du Monet
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peter fraser
24 Dec 2013, 08:51 AM
Well I've never been a pessimist. I've watched too many pessimists lose their money, and I've watched the more courageous make fortunes. It's luck but they are playing with the house on their side if you get my drift. Central banks encourage people having a go and punish those who hoard money. They are the rules that I have noted over some decades.

But still I didn't write that, and I've found that there is a core of people who have been more consistently correct than wrong.
They punish those who have a go as well. How many of those were destroyed by the GFC? How many are being destroyed by what is now an enduring great depression....you checked the the state of the US and Europe for the last few years?

Besides the money printing regime is coming to an end. Unless the ECB hoards gold, that is literally removes it from the market, it will return as the monetary standard and all your fiat dreams will be over.....permanently.

All fiat money delivers is giant boom bust cycles, or maybe you think there was no GFC?

As I said, this is a 3 way fight between gold, USD and the Euro, only one of which can win. And if the Euro wins the future won't be the happy one the profligate has known under the easy FED.

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The future may be a place where the German school master beats the profligate!
The next trick of our glorious banks will be to charge us a fee for using net bank!!!
You are no longer customer, you are property!!!

Don't be SAUCY with me Bernaisse
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Elastic
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A slightly less rosy article on the US consumer.

americans-stay-home-as-christmas-store-traffic-drops-21pc

Quote:
 
Americans stay home as Christmas store traffic drops 21pc
Date
December 24, 2013 - 10:01AM

A woman carries bags of purchases though Times Square in New York, December 23, 2013. With only two shopping days left retailers are trying to play catch up as this year has 6 fewer shopping days between Thanksgiving and Christmas than normal. REUTERS/Carlo Allegri (UNITED STATES - Tags: BUSINESS)
US retailers are trying to play catch up as this year has 6 fewer shopping days between Thanksgiving and Christmas than normal. Photo: CARLO ALLEGRI
US store visits plummeted 21 per cent and retail sales dropped 3.1 per cent in the week through Saturday, signalling a lacklustre finish for the most important selling season of the year.

Holiday purchases increased 2 per cent from November 1 to December 22, said Bill Martin, co-founder of Chicago-based researcher ShopperTrak, which released the data. Sales will rise 2.4 per cent for the whole season, the smallest gain since 2009, he reiterated.



Read more: http://www.smh.com.au/business/retail/americans-stay-home-as-christmas-store-traffic-drops-21pc-20131224-2zv7e.html#ixzz2oLXPWkq3
Only a rat can win a rat race.

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Count du Monet
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Ben, stop that taper! :lol
The next trick of our glorious banks will be to charge us a fee for using net bank!!!
You are no longer customer, you are property!!!

Don't be SAUCY with me Bernaisse
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peter fraser
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Elastic
24 Dec 2013, 11:10 AM
A slightly less rosy article on the US consumer.

americans-stay-home-as-christmas-store-traffic-drops-21pc

Consumer habits are changing - online sales were up by 17.3% on Thanksgiving and Black Friday.
http://www.reuters.com/article/2013/12/01/us-usa-retail-blackfridayweekend-idUSBRE9B00E520131201

Lets wait and see the Xmas sales number in total before we rush into the wrong conclusions.

There is no doubt though that sales are up over the last 12 months.



Any expressed market opinion is my own and is not to be taken as financial advice
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Dr Watson
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Count du Monet
24 Dec 2013, 10:04 AM
They punish those who have a go as well.
Like many people I was heavily invested (in stocks) prior to the GFC and I was thoroughly punished for it. I didn't know the meaning of the word 'bearish' in 2007. The only experience I'd had until that time was one of rising markets. It was a lesson about the dangers of blind optimism.
The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt — Bertrand Russell
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Logic
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Peter
How much of that consumer spending is done on debt?
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