The economy appears to be firming. GDP grew at a relatively strong annualized rate of +3.2% q/q in Q3, the fastest in two years. Consumption grew +2.8%, net exports contributed +0.9pps, the second consecutive gain, and after three consecutive quarters of losses, even investment rose, gaining +2.1%.
After tax corporate profits rose to +5.2% y/y in Q3, the first positive reading in seven quarters, a good sign for the economy. Consumer confidence rose sharply after the election, gaining 6.3 points to 107.1 as the present situation component rose 7.2 to a very strong 130.3, both the highest levels since August 2007. The future expectations component gained 5.7 to 91.7, the highest in 18 months. But that optimism was only partially visible over the Thanksgiving/Black Friday weekend.
Online sales were positive, gaining 18% y/y to USD5.3bn, and spending on Monday rose 12% y/y to USD3.5bn, according to Adobe Systems. But sales in physical stores, typically about 10 times the volume of e-commerce, suffered. The National Retail Federation estimated that store sales fell -3.5% y/y over the weekend, while RetailNext reported y/y declines of -11% in store shoppers and -10% in sales on Black Friday.