Consumer spending rose in November for the fifth straight month
Sean Jacobs works on a wind turbine part at the MasTech Manufacturing plant in Manistee, Mich. Jacobs used to make parts for the auto industry, and if his plant hadn't switched to wind parts, he'd be out of a job.
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STACEY VANEK SMITH: Consumer spending rose in November for the fifth straight month. Here to talk with us about this is Diane Swonk, chief economist with Mesirow Financial in Chicago. She joins us live. Good morning, Diane.
DIANE SWONK: Good morning.
VANEK SMITH: Consumer spending up a little bit in November. Sounds like good news.
SWONK: It is good news. It's welcome news that consumers are welcoming their purse strings, loosening their purse strings and spending again. There is a sense that consumers are a little more confident than the were over the spring and summer when the economy nearly stalled out. That's the good news. We are seeing consumers do that and there is a sense of trying to return to normality.That said, those food lines and the shelters are still getting more full than ever. So even though we are doing a little better this holiday season and spending a little more aggressively, we are also dipping into our savings and those who were hit hardest by the recession are still really struggling.
VANEK SMITH: Speaking of that, the manufacturing sector is looking pretty good this month too. We had some strong numbers there. New orders are at their highest level in eight months. What are we seeing from manufacturing?
SWONK: What we're seeing is that the manufacturing sector is benefiting from two things. One is the consumer is back, although not in full force but back and the other side of it -- exports remain extremely strong. You add to that the fact that companies have enormous amount of cash on their balance sheets -- a lot more than consumer have -- in their purses. And they have yet to spend it. And it looks good prospects that the manufacturing sector will remain a shining star in the U.S. economy and continue to recover and regain ground lost, as we move into 2011.
VANEK SMITH: Diane Swonk, with Mesirow Financial. Happy holidays, Diane.
SWONK: Happy holidays to you as well.