Except for car buying, the consumer didn't show signs of holding back in November even with a big pickup in energy prices that is beginning to hit at the wholesale level.
That is what today's data shows with a 1.2 percent pickup in retail sales for November, double expectations, and a big 3.2 percent in jump in producer prices, the biggest increase in that number since 1973. If food and energy are removed from the mix, the producer price index would have risen just 0.4 percent.
That retail sales number could bode well for the holiday shopping season, but longer term the impact from energy is unclear. Scotsman Capital Managing Director Vince Farrell says the stronger spending by consumers is not surprising when you take a look at household wealth. Recent government data for the third quarter shows U.S. consumers had a total net worth of $58.6 trillion. Financial net worth, without home values, totaled a record $31 trillion.
"It would make sense the retail sales are up so much," said Farrell, a CNBC contributor. Holiday sales? "I think it's probably going to be better than expected. We came into it with low expectations," said Farrell. Some experts had bet the early Thanksgiving and big markdowns in November would rob sales from December. For the season, analysts largely expect low single digit gains.
Toys R Us CEO Gerald Storch says he expects to a big surge in holiday spending yet to come.
"We're about half way through. It started very strong. Sales have been erratic in the past week or two but we're expecting a big pickup in the last two weeks before Christmas," he told Erin Burnett on "Squawk on the Street."