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Retail sales make a comeback

After upward revisions to previously reported data (another reason why government statistics can never be as reliable as market-based indicators such as commodity prices, which have been pointing to relatively strong growth since last July), retail sales are now seen to have surged at a 12% annual rate in the past five months, and they are up 7.7% in the past year. November sales were only 0.3% below their all-time of late 2007. At this rate, December could be the best Christmas ever, and fourth quarter GDP could be substantially stronger than third quarter.

This should put to rest any lingering talk of a double-dip recession, of course. And with the rising confidence that will come with an extension of the Bush tax cuts, the question now becomes how much stronger the economy will be next year.

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