US consumers had largely brought their Christmas shopping forward for fear of shortages, with spending peaking in October, and the world’s largest economy is now threatened by Omicron on the one hand, and inflation on the other.
US consumer spending slowed in November, registering an increase of 0.6%, halved compared to October, according to data from the Department of Commerce released Thursday.
“Consumers spent less enthusiastically in November as they moved their holiday shopping earlier in the season and continued to face escalating prices and reduced product availability,” Lydia commented. Boussour, economist for Oxford Economics.
Global supply difficulties had raised fears that Santa’s hood would not be full. But logistical problems, including congestion at ports, have eased in recent weeks, according to the White House.
“The goods are transported, the gifts are delivered and the shelves are not empty,” Joe Biden greeted Wednesday.
– Rebound in consumer confidence –
And it is now inflation that worries.
Thus, the incomes of Americans increased a little (+ 0.4%) in November, but this gain was wiped out by inflation, pushing down (-0.2%) income and purchasing power for the fourth month in a row.
The increase in prices over one year, in fact, is the highest since 1982, with annual inflation in November of 6.8% according to the CPI index, and 5.7% according to the PCE index, because, in particular, energy prices, which are 34% higher than last year.
The opposition accuses the Biden administration of an inflationary policy, and denounces the president’s gigantic plan of environmental and social reforms, including 1.750 billion dollars of investment over 10 years.
Joe Manchin, a Democratic senator whose vote is essential for the adoption of this plan, vetoed Sunday, expressing fears that these expenses only fuel inflation. Joe Biden, however, still hopes he can save his plan.
However, this has not dented consumer confidence, which even rebounded in December, according to the final estimate of the University of Michigan survey released Thursday.
Morale is particularly good among households in the bottom third of the income scale, who expect their wages to rise in the coming months.
The labor shortage affecting the lowest paid jobs, in catering or logistics for example, is indeed pushing employers to offer better wages to attract candidates.
Weekly jobless claims thus remained unchanged in the United States last week, at a still very low level.
– Omicron could worsen inflation –
“Everything from consumer spending to home sales and investments was solid in November before the arrival of the Omicron variant,” said Diane Swonk and Yelena Maleyev, economists for Grant Thornton.
Orders for durable goods, that is to say those used for three years or more such as cars, household appliances or electronics, rose more than expected in November (+ 2.5%), thanks in particular to orders aircraft and transport equipment.
As for new homes, their sales climbed in November, but after a very sharp fall in October, and their prices continue to rise, according to Commerce Department figures released Thursday.
All over the country, events are canceled, restaurants are seeing reservations plummeting, contamination is disrupting business operations, and the situation is expected to deteriorate further.
The two economists of Grant Thornton thus foresee a difficult month of January for the American economy.
And this could contribute to further increase prices, they add: “the consensus among the members of the Fed (the American central bank, editor’s note) is that the variants disrupt supply chains, including the workforce. work, than demand and are, therefore, more inflationary “.