Economics: Why US Consumer Spending Got A Boost

(Drivebycuriosity) - US retail sales had been a bit sluggish recently. They increased meager 0.1% from August to September, the same rate as in August (retail). Consumer spending had been hold back by weak wage growth and an accelerating inflation, fueled by climbing oil prices. But the situation is changing.

This morning we learned that US wage growth accelerated to 3.1% YoY in October (chart below calculatedrisk). And the headwinds from the oil market got weaker. The futures for global oil - Brent Crude & WTI - dropped both more than 10% from their recent peaks, which translates into lower gasoline prices on US pump stations.

As a result US consumers will have suddenly more money in their wallets which should boost the retail sales, just in time for the beginning holiday spending season.

Enjoy