On Wednesday, US Commerce Department data had unmasked that US consumer spending, the ‘Aqua de Vida’ of world’s No 1 economy accountable for roughly a two-third of entire economic activities in the US, surged more than anticipated last month as American households, wealth of which have been hovering at an all-time high following a flurry of generous Government stimulus packages after and before the November 2020 US Presidential election, had yet to show any kind of signs to hold back spending amid a sky-scrapping inflation, signalling a vigorous resurgence in economic activities early in Q4, 2021.
Aside from that, in the latest flashpoint of a roaring US economy with capital markets hovering close to records alongside a roughly 1-1/2-year peak American currency, other economic data released earlier in the day had unveiled that the number of Americans filing for first-time state unemployment benefits tumbled 71,000 to 199,000, a level never witnessed since the November of 1969, reigniting hopes of a pluperfect end to fiscal 2021.
US consumer spending perks up sharply in October
According to US Commerce Department data, US consumer spending that accounts for a two-third of US economic activity as beforementioned, torrented as much as 1.3 per cent in October following a 0.6 per cent upsurge in September, however, a meteoric rise in spending was submissively influenced by higher prices alongside a blistering inflation-surge, suggested analysts.
Nonetheless, a staggering build-up in price pressures had escalated further last month as the US Federal Reserve’s key inflation indicator, core PCE (Personal Consumption Expenditure) price index, accelerated 4.1 per cent over the past twelve months through October compared to a rise of 3.7 per cent logged in September on an annualized basis, more than double of US Fed’s target of 2.0 per cent.
Meanwhile, citing an early start-off of holiday shopping alongside a cascade of congested supply chains across the globe, a Chief Economist at Bank of the West in San Francisco, Scott Anderson said, “Moreover, continued clogged supply chains and port delays could lead to product scarcities on shelves as cargo ships remain anchored offshore waiting to be unloaded at the large ports in Southern California”.