The slowdown in real consumption growth to a more modest 2.0% annualised in the final quarter of last year was a disappointment, particularly as households were benefitting from a further decline in gasoline prices, leaving them with more money to spend on other goods and services. Thankfully, real consumption has recovered at the start of the New Year, with a 0.4% m/m gain in January. The upshot is that real consumption growth is now on track to accelerate to 3.0% annualised in the second quarter. The strength of that pick-up suggests the fourth-quarter malaise was, at least partly, due to the unseasonably warm and wet weather.
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