It doesn’t matter where you look; retail sales during the Christmas / holiday season, unemployment figures, consumer confidence, the stock market, or even Christmas tree sales.  All have shown improvement.  This renewed confidence, whether it is from keeping your job to seeing your 401(k) or IRA accounts appreciate, is creating momentum. 

Barring some huge economic event, such as one of the European nations defaulting on their debt or a string of municipalities doing the same here at home in the U.S., we should see pretty clear skies for investors in 2011.  Along these lines, I would not be surprised to see higher energy and food prices in the year ahead.  Inflation has been quite tame; however, many of the inflation figures bantered about do not take into consideration energy and food prices. Read more

• Retail sales rose 0.8% in November from a month before, reaching their highest level since 2007, the Commerce Department said Tuesday.  More broadly, sales were up 7.8% from a year ago for the three-month period through November.
• The surge pushed stocks higher this week, as retailers, economists and investors, while cautious, were encouraged that consumers—who account for 70% of the U.S. economy—are again opening their wallets.  ”I wouldn’t break out the Champagne, but things are looking better,” said IHS Global Insight economist Chris Christopher.  ”There was a lot of pent-up demand.  Consumers are feeling a little more confident.” 
• Both FedEx and UPS have announced that they are experiencing increased, if not record, shipments in December and are becoming more upbeat about global economies.  This is important because shipments directly relate to sales / business activity and validates the prior information regarding this year’s retail season. Read more

• The Thomson Reuters/University of Michigan’s preliminary December reading on the overall index on consumer sentiment came in at its best level since June, and the third-highest level since the start of 2008, according to the survey.  At the same time, the survey’s barometer of current economic conditions rose to its highest reading since January 2008, just after the economic downturn began. Read more

• The Conference Board, a private research group, said its index of consumer confidence increased to 54.1 in November from 49.9 in October.  While confidence remains low by historical standards, the November reading was the highest since June.
• Various retail industry reports show that Black Friday and Cyber Monday sales showed nice increases over last year.  This is a sign that consumers are not only shopping, but comfortable spending more money. 
• The number of people who signed contracts to buy homes jumped in October, marking the third monthly gain since contract signings hit a low in June.  Economists had forecasted contract signings to decline, given the numerous problems facing the housing industry. 
• Goldman Sachs noted in a memo to clients this week that the bank is very upbeat and has shifted its growth targets considerably upwards.  Its analysts believe that demand is accelerating very rapidly, and that we’ll see it grow at a 5% annualized rate in the fourth quarter.  Read more