CIBC Research discusses its reaction to today's US consumer spending for the month of November.
"Consumer spending in the US fell for the first time since the spring lockdowns in November, as the second wave of Covid caused households to become more cautious. Total spending dropped by a worse-than-expected 0.4%, while there was a two tick downward revision to the prior month. November's drop reflected a decline in spending on both services and goods, with a drop in food services and accommodations being the main factor behind a drop in the former category. Incomes fell by a larger-than-expected 1.1% as government Covid relief programs continued to wind down. PCE prices were unchanged on the month, leaving the annual inflation rates at 1.1% and 1.4% for PCE and core PCE prices, respectively," CIBC notes.
"December is likely to prove even more challenging for consumer spending as some states are moving to tighten restrictions on activity during the holidays as new Covid cases continue to skyrocket, while mobility data shows that people are spending less time outside of their homes," CIBC notes.