Consumer Hangs Around for Holidays

Investors had reason to celebrate after a key reading of consumer sentiment rose for the third straight month in December, surpassing economists' predictions.

Meanwhile, a check of holiday retail sales suggests the U.S. consumer hasn't gone into hibernation, at least not to the extent that was once feared. While some sectors are struggling, there's evidence that overall retail sales could post modest gains this Christmas, a much better performance than some had predicted at Thanksgiving.

"The improvement in consumer's confidence suggests that spending is going to keep pace and not going to fall off," said Jennifer Rossum, economist at Thomson Financial/IFR. "But without any growth in income, we're not going to see that pop in retail sales that we're looking for to pull the U.S. economy out of a recession, at least not in the first quarter."

Feeling Good

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