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5 Numbers Bernanke Will Be Watching

These figures will dictate how soon the Fed stops QE

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Consumer Spending

Ann Taylor retail store 630Bernanke made it clear that GDP, unemployment and inflation are the Big Three numbers he’s watching when it comes to whether it will step off the bond-buying gas, but consumer spending is something the central bank — and the market — will no doubt be keeping tabs on too.

That’s because we’ve got a consumption-driven economy, with consumer spending accounting for about 70% of all economic activity. True, a big chunk of that comes from healthcare and other less-than-discretionary spending, but a good 35% still comes from retail sales alone.

Higher home prices, a thawing job market and debt reduction helped consumer spending pick up in the first few months of 2013, but then it went negative for the first time in almost a year. The Fed will be watching this end-of-the-month report to see if the economy is ready to stand on its own two feet.

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