New Data Defy Recession Fears

A surge in November retail sales shows that consumer spending may not be slowing as expected. Meanwhile, producer price data underline inflation risks

U.S. economic reports released Dec. 13 argued strongly against market fears that a sharp economic slowdown is already under way, as well as perceptions by some that the Federal Reserve's inflation fears are misplaced. Although downside risks to the 2008 economy are clear, a jumbo surge in November retail sales shows that falling confidence is not translating to spending restraint. And, soaring producer prices through November make equally clear that the Fed faces considerable upside risks for inflation.

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