Real household spending increased unexpectedly in Q4 of last year, leaving annual growth at 1.5%, the strongest rate since Q3 2010. This rise was particularly impressive given the downward impetus to spending from the reversal of Q3’s Olympics-related boost. Following the climb in the savings ratio over the last two years, we may be seeing the fruits of households’ improved financial position. Nevertheless, whether this recovery can continue in the near-term is unclear.
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