Consumer spending reported solid growth in November, giving another positive sign to the industry that the Federal Reserve will likely raise interest rates next week for the first time in nearly a decade, according to an article in Reuters.
From the article:
Retail sales excluding automobiles, gasoline, building materials and food services increased 0.6 percent after gaining 0.2 percent in October, the Commerce Department said. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.
Solid domestic demand in November supports expectations that the Fed will raise its benchmark overnight interest rate from near zero when policymakers conclude a two-day meeting next Wednesday, despite weak inflation.
The November jobs report posted similar news, with job creation increasing by 211,000 for the month. This also gave confirmation that the Fed will likely raise rates.
“The November jobs report showed another strong month of job gains, along with upward revisions to prior months,” said National Association of Federal Credit Unions Chief Economist Curt Long. “This should put to bed any doubts about whether the Fed will announce a rate increase later this month.”