Consumption continues to climb

The November report on US Personal Consumption Expenditures shows another post-pandemic high, ten percent above the February 2020 PCE (as shown on chart below). This is, in my opinion, at least 500 billion more dollars per month in spending than any reasonable person would have predicted pre-pandemic. Until spending settles some there will continue to be price increases and occasional gaps between demand and supply (despite all efforts to calibrate). One tenuous sign of eventual reduced demand is a slight decline in the personal saving rate for November compared to month prior. (See related analysis of the November retail sales report.)