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The U.S. recovery accelerates

December 20, 2010

The U.S. consumer is beginning to feel as though they will not lose their job next week, and that the cuts are done.

As a result, spending is probably up this month.  I am actually seeing long lines in stores when I shop – very long lines.

Economists expect consumer spending to be good for November -and I do too.  I no longer think the Gallup polls are good indications of spending.  My expectation is that due to society wide changes, frugality is “in” and appearing to spend less is part of the new normal.   I would tell people I am spending less this year, when by any objective assessment I am clearly spending more.

Even the Gallup polls show parity with last year – but as far as I can tell the Gallup information is equal weighted, not spending weighted.   Upper income spending drives most of the U.S. Economy.  My expectation is that high-income spending is up dramatically over last year for the Holiday Season.

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