U.S. consumers are surprisingly strong. Never before have we seen such high unemployment (currently 6.7%) accompanied by rising personal incomes, a savings rate that has doubled in one year, lower credit-card balances and higher net worth. In aggregate, U.S. households now have less debt than disposable income—that ratio is about one-third lower than during the 2008 financial crisis. The power of increased spending capacity matched with pent-up demand for deferred vacations, restaurant meals, sporting events and entertainment could fuel economic growth, as the pandemic starts to recede sometime next year. The housing market is picking up speed. Rising U.S. home values are making many Americans feel wealthier. New home construction is rising, with housing starts in October up nearly 5% from September. Strength in the housing market has a multiplier effect, with rising sales leading to more spending on home improvements, new appliances and other household goods. Inflation looks poised to surprise on the upsid



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