Spending could accelerate a Wall Street recovery

The Thanksgiving-shortened week ended on a not-so-thankful note for Wall Street, as news of a new COVID-19 strain overseas sparked worries over potential renewed lockdowns, with equity markets seeing the steepest daily decline in two months.

However, the U.S. economy also showed broad-based signs of acceleration heading into the end of the year, with consumers ramping up spending, businesses stepping up investment and jobless claims falling to historic lows.

Household spending rose 1.3% in October from a month earlier, while personal income increased 0.5% last month, the Commerce Department said Wednesday. Consumers are benefiting from a strong labour market. And they are spending at a faster pace than inflation, which recently hit a three-decade high.

Stocks are under pressure, driven by fears that the omicron variant of the coronavirus identified in South Africa could disrupt the economic recovery.