Underestimated Strength of The Economy?
The question is: How abnormal are these times?
A snapshot of a moving target is of limited use, but: Sales the day after Thanksgiving were 3% higher than last year. Over the weekend, 172 million people, shopping in stores and online, spent an average of $372.57, a 7.2% increase over a year ago, when 147 million shoppers spent $347.55 per person.
Is this evidence that the recent deleveraging of indebted households has breathed fresh life into personal consumption, which normally is 70% of economic activity? Is it evidence of underestimated strength of an economy in which more than 93% of those who want to work are employed, and more than 93% of mortgages are being paid on time? Is it evidence that Washington's jaw-dropping interventions with hundreds of billions of dollars are having their intended psychotherapeutic effects? How much is it evidence of the decline of the price of a gallon of regular gasoline from $4.10 in July to $1.81 today? Over a year, every 1 cent decline is a $1.5 billion saving to consumers.