The economy turns the corner? Consumer spending likely up slightly

According to Neal Soss, chief economist at Credit Suisse (CS), "A business recovery has taken root, notably in output and sales, although not yet in employment." He continues, "The recovery will likely be mediocre relative to previous recoveries following severe recessions."

Auto sales climbed to an annual pace of 10.5 million units in October, a month-over-month gain of 14%. However, activity still remained shy of the 14.1 million annualized rate reached in August during the "Cash for Clunkers" program.

Retailers in the U.S. sustained a sales increase of 1.4%, according to Commerce Department data released a almost a week ago, with department stores and Internet retailers, such as Amazon (AMZN), leading the way. This follows a 2.3% decline in September. Profits have been supported, though, by cost containment more than increases to the top line.

Bloomberg says that the Monday's consumer spending report may show that incomes grew 0.2% in October, the largest gain in five months. Even this modest increase, which is a change from a flat September, payrolls still fell 190,000 in October, bringing the job loss tally since December 2007 to 7.3 million.

New house purchases may be up 0.8%, to an annualized pace of 405,000,. According to the Bloomberg survey, with the sale of existing homes up 2.3% last month to an annualized 5.7 million. The S&P/Case-Shiller index of property values in 20 U.S. metropolitan regions will be released on Tuesday and is expected to show a decline of 9.1% in September, the smallest drop in two years.