#MoneyConscious Mash Up: National Fruitcake Day Edition

While most of the world is on hiatus through the end of the year with Hanukkah, Christmas, Boxing Day and New Years causing celebrations galore, the economies of the world yet churn. The U.S. economy looks to end the year with better reviews and less drama than The Interview premier.

The big news of the week came early on Tuesday. The Commerce Department released its final third-quarter Gross Domestic Product (GDP) report, which increased to 5 percent from second quarter’s 4.6 percent. This is the fastest quarter expansion since third-quarter 2003 and suggests the Obama economy will be remembered more fondly than this first-class Scrooge. The economic gains were largely from the healthcare, recreation, financial services and software sectors. Overall, the last two final GDP reports confirm a return to a normal economy and is as welcome a sign as a return of Cuban cigars to the U.S., though they may be e-Cubans now.

Next on Tuesday came the University of Michigan’s December Consumer Sentiment Survey. It showed a significant increase to 93.6 points from November’s 88.8 points. The current conditions component increased 2.1 points from November. The future expectations component increased 6.5 points from November. With an improving job market and low gas prices, most Americans feel good about the now and the not-far-from-now.

Finally, on Tuesday, the Commerce Department released its November Personal Incomes & Outlays report. It showed consumer spending increased 0.6 percent over October’s upwardly revised 0.3 percent increase. The report also showed personal incomes increased 0.4 percent, after October’s upwardly revised 0.3 percent increase. While the month-to-month trend shows spending increases beating income increases for the first time in months, year-over-year consumer spending is up 4 percent and wages and salaries are up 4.2 percent. We hope this spending to income inversion is a short-lived blip.

Wednesday’s Labor Department’s Jobless Claims report for the week ending December 20th saw initial jobless claims fall 9,000 to 280,000. This helped bring the 4-week moving average, which irons out week-to-week volatility, down by 8,500 to 290,250. Both signs point to a healthier job market and should make most Americans feel good heading into 2015.

On Friday, the National Retail Federation (NRF) said it still expects 2014 holiday sales to increase 4.1 percent over 2013, a forecast it gave pre-Black Friday. November Retail Sales increased 0.6 percent over October’s and suggest the NRF might be right.

The economy looks good as 2014 comes to a rapid close. Most economic news looks strong and the preverbal Santa Claus Rally is making Wall Street and all its investors, including yours truly happy. If you’re not an investor, make a resolution to be one by 2016.

It makes sense that the stronger economy has caused Americans to increase spending relative to wage and salary increases at this time of the year. 2015 looks to be another good year, at least initially. While we’re happy that Americans are happy, we still hope most will use the improved economy and personal financial situations to repair past troubles and prepare for future ones.

Going against conventional wisdom like alcohol consumption increasing life spans, the U.S. economy is the shining star on the global economic stage. It, however, does not function in a vacuum and the global economy is struggling. Stagnation in China, threatening deflation in Europe and ever-present instability in the Middle East could spread into the U.S. in unique ways. It’s not probable, but it is possible. Prepare for the possible.

On the domestic front, our concern remains wage growth. While wages have increased, inflation has been to wages what Santa was to cookies. Finally, job quality remains a concern.  Most of the recent job growth has been in the service sector, which is good for starting and extending careers but not for all the stuff in between.

By this time next week, The Debt Free Guys will have published our fourth book and first full-length book, 4: The Four Principles of a Debt Free Life. This is the time of year when Americans commit to shed pounds and debt and acquire health and financial independence. 4 is an entertaining take to help you shed debt and acquire financial independence. Be sure to purchase your hard or e-copy next Friday, January 2, 2015. It’ll ensure a successful and prosperous 2015.

That’s this week’s #MoneyConscious Mash Up and our last for 2015. Come back every Saturday for our slightly off beat take on economic news.

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still somewhere over the rainbow?

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