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Taxpayers must pay the freight for over-budget train projects
Topic - Chris G. Christopher
U.S. consumers are cheering up with Christmas approaching and appear set to put in a solid performance during the critical holiday shopping season.
It was the tax cut that nobody noticed two years ago. And it was rarely mentioned in the fight between Congress and the White House last year over the expiring Bush-era tax cuts. But this month, the payroll-tax cut suddenly registered on everybody's radar screen — when it went away.
The holiday shopping season got off to a strong start over the long weekend, with nearly 5 in 6 Americans making an appearance at the malls or visiting retailers online as rising spirits prompted an early hunt for bargains.
U.S. consumers are in an upbeat mood and are preparing to spend more this holiday season than last year's, providing a badly needed boost to the economy. But headwinds from the lingering effects of Superstorm Sandy and the year-end political storm brewing in Washington could put a damper on their shopping spree, analysts say.
It's not making headlines, but this year's unusually mild weather and low home-heating costs substantially offset the pinch from fast-rising gasoline prices and underpinned the revival of consumer spending.
The economy last month offered up no new jobs in celebration of Labor Day and appears in danger of slipping back into recession despite massive efforts by Congress and the Federal Reserve in the past three years to keep it afloat.
A report revealing the first decline in consumer spending since the Great Recession shocked Wall Street investors Tuesday and raised fears that the economy could fall into a double-dip recession.
Within the space of a week, the nation has witnessed worst performances on record of new-home sales, home prices and building — evidence that the housing market has sunk into a double-dip recession that poses a significant drag on the overall economy.
The economy turned an important corner at the end of last year, recouping all the ground lost during the Great Recession and expanding into record territory.
Still, consumers are getting a lift, at least psychologically, from the big gains in the stock market as well as housing prices, which also posted double-digit increases in the past year, said Chris G. Christopher, an economist at IHS Global Insight.
"The good news for many American households is that wage and salary gains have been outpacing consumer price increases since August, giving consumers some pricing power," said Mr. Christopher.