There are signs that the U.S. economy will get through the fiscal cliff just fine. Consumer spending rose in November by the most in three years and a gauge of planned spending by businesses also jumped higher according to government data.
The Commerce Department said today that inflation-adjusted consumer spending rose 0.6% in November. This was the strongest gain since August 2009. In addition, after-tax income climbed 0.8% inflation-adjusted.
In a separate Commerce Department report, a gauge of planned U.S. business spending rose much more than expected in November. Non-defense capital goods orders, excluding aircraft, jumped 2.7% in November. This was the second straight month of solid gains in this reading. The government reported that October’s reading was revised upward to 3.2% from the previously reported 2.9%. Overall durable goods orders rose by 0.7% in October.
Both readings have given an indication that, so far, few consumers or businesses are overly worried about Washington’s fiscal cliff. This is contrary to what many economists thought, that fears over what might happen would curtail spending.
Let us hear your thoughts below: