The indefatigable consumer

Apparently it's all coming up roses on the consumer spending front, yet shouldn't the following continue to be causing somebody in high places some concern?

Americans earned and spent more as the holiday season began, reinforcing the role consumers will play in extending the economic expansion to a sixth year.

Spending rose 0.5 percent in November, the most in four months, and incomes increased 0.3 percent for a second month, the Commerce Department said today in Washington.

Yes, income was up, but spending was up more -- a lot more -- in November. Personal income rose $33.8bn while personal consumption expenditures ran up $50.5bn. No surprise then that the personal savings rate took another plunge, down to -1.0%, the reversal of a late summer-fall trend toward more savings (or actually less dissaving).

If the personal savings rate in November had simply remained where it was in October (at -0.7%), consumption would have been $27bn less than actual, which would have dragged down the growth in consumption from the actual 0.5% to 0.2%. I doubt the press would have been crowing then. If personal savings had magically reached simply zero in November, consumption "growth" would have been -0.5%.

Is this fuelled by rising debt? Equity withdrawals? Selling the family jewels?