Economy Watch: Holiday Spending Rises Compared With ’12; Personal Income, Spending Surge in November
- Dec 27, 2013
The first holiday spending estimate came in on Thursday, the day after Christmas, from MasterCard Advisors, which reports in its Spending Pulse that consumer spending for a wide variety of goods associated with gift-giving from Nov. 1 to Dec. 24 was up 2.3 percent compared with the same period last year. The company tracks spending on apparel, furniture and furnishings, electronics, jewelry, and other luxury goods.
The year-over-year increase from 2011 to 2012 in these categories was only 0.7 percent. Jewelry sales topped the other categories for the 2013 holiday period, driving much of the overall annual increase. Apparel sales grew modestly, while luxury and electronics sales didn’t move much compared with last year, according to MasterCard Advisors.
Not even a shorter sales season between Thanksgiving and Christmas this year, as well as spells of bad weather in some parts of the country, seemed to deter holiday shoppers. Then again, during the 2012 sales season large populations in the Northeast were still suffering the aftermath of Hurricane Sandy, and the whole country seemed worried about fiscal dysfunction in Washington – in the form of the looming “fiscal cliff” in those days.
Personal Income, Spending Rise in November
Some of that additional spending might have been because consumers had a bit more money to spend. The Bureau of Economic Analysis reported earlier this week that total personal income increased $30.1 billion, or 0.2 percent in November. Likewise, personal consumption expenditures (PCE, the government acronym for people out spending) increased $63 billion, or 0.5 percent.
Real PCE — PCE adjusted to remove price changes, which have been minuscule lately – also increased 0.5 percent in November, compared with an increase of 0.4 percent in October. The price index for PCE increased less than 0.1 percent in November, according to the BEA, in contrast to a decrease of less than 0.1 percent in October (not much movement, in other words). The PCE price index, excluding food and energy, increased 0.1 percent in November, the same as in October.
Separately, the U.S. Department of Commerce said on Thursday that for the week ending Dec. 21, initial unemployment claims were an annualized 338,000, a decrease of 42,000 from the previous week. The less volatile four-week moving average was 348,000, an increase of 4,250 from the previous week, and mostly reflecting rises in claims early in December.
Wall Street enjoyed some post-Christmas mirth on Thursday, with the Dow Jones Industrial Average gaining 122.33 points, or 0.75 percent (and once again reaching an all-time high). The S&P 500 was up 0.47 percent, also setting a record again, and the Nasdaq advanced 0.28 percent.