The shock to consumer confidence after the Sept. 11 attacks appears to be over. The latest evidence is the December report on income and consumption spending, which shows personal income rising 0.4%, the first gain since last August.
Consumer spending declined 0.2% as the auto buying surge ended. However, consumer spending still remains high.
Spending for durable goods-a key end market for electronic components-dropped 4.7% in December, but was 2.8% higher than before the terrorists attacks. The surge and then decline was entirely in motor vehicles. Consumer electronics purchases rose steadily over the second half of last year.