A combination of easing supply constraints for the auto industry, covid-19 cases declining, and Americans getting their holiday shopping out of the way contributed to the increase, Oxford noted.

There are several reasons for the mismatch between how Americans say they are feeling and how much they are spending. The job market is improving, with workers in some sectors seeing a jump in wages. And with households sitting on a record amount of savings, consumers may be feeling they can afford to splurge. Some observers, including Nobel prize-winning economist Paul Krugman, also believe sentiment data may now be more of a reflection of political beliefs than an assessment on the economy.

Oxford expects Americans to keep spending at a brisk pace in 2022—they’re forecasting a 4% jump in consumer spending next year.

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