They say that you should never underestimate the consumer, and this morning’s update on personal income and spending reminds just how practical that proverb can be. Yes, recession may be coming, but if the gloomy analysis is having an impact on Joe Sixpack, it’s not obvious in the latest data from Bureau of Economic Analysis.
Admittedly, disposable personal income isn’t exactly soaring, although it rose at a higher pace last month vs. October (0.4% compared to 0.2%). At least the trend is encouraging given that we’re told an economic slowdown is upon us.
But the real news is in the spending column. In particular, personal consumption expenditures soared by 1.1% last month. As our chart below shows, that’s impressive by recent standards. In fact, the last time PCE jumped so high was more than two years ago.
Granted, November always enjoys a seasonal burst of holiday shopping, although even by that standard holiday cheer of late is running considerably hotter in 2007.