This month, American consumers have received some early Christmas presents. Late last week, US payroll data revealed that the pace of job creation in America is now running at its highest level since 1999, as the economy continues to expand.
Then this week the average price of petrol at the pump tumbled to $2.77 a gallon, some 61 cents below last December, due to falling oil prices. In a country that is addicted to cars, that could put another $100bn into the pockets of American households next year, Moody’s calculates. And there are other gifts. Global food prices are now about 5 per cent lower than last year.
Even core US consumer price inflation (which excludes those volatile commodities) has quietly slid to just 1.5 per cent a year, well below the 3 per cent level that consumers anticipated according to surveys. Or to put it another way, American households are now experiencing that rare blend of expansion with low prices. It is a mix that might make Santa smile.