From today's WSJ
: "Many economists are responding to today’s merry news on consumer spending by increasing their overall economic growth forecasts.
Morgan Stanley increased its forecast for fourth quarter growth to 4.3% from 4.2%.
J.P. Morgan, Credit Suisse, Royal Bank of Scotland and Barclays Capital each boosted their fourth-quarter projections a full percentage point on the retail data.
Some economists are even more optimistic. John Ryding and Conrad DeQuadros of RDQ Economics project fourth-quarter GDP will expand nearly 4%."
“The consumer appears to be alive and well and willing to open their pocketbooks wider,” they said.
Michael Feroli of J.P. Morgan Chase is encouraged that gains can continue into next year. “We think the strength in the consumer can be sustained: last week we revised up first half 2011 consumption growth on the expectation that the tax compromise goes through, boosting disposable incomes and spending. In part because of this, we look for first half GDP growth that is as good or better than the fourth quarter outcome,” he said. J.P. Morgan expects fourth-quarter growth to come in at 3.5%.