Consumers in the world’s two largest economies are doing what they do best – spending money. It’s a happy harbinger for the global economy and may explain why global markets lost little ground on Friday, after the release of disappointing economic data. The US economy shrank 1 percent, at an annual rate, in the first three months of the year, mainly due to a sharp drop in inventory spending by businesses, blamed on the icy weather.

But consumers did their bit to drive growth. US retail sales rose a revised 1.5 percent in March – the largest increase since March 2010, according to the New York Times, reflecting “pent-up demand after a brutally cold winter”. And economists believe sales will continue to rise as household finances show signs of improvement, according to the BBC.

For decades, US consumption drove global growth and, after having the stuffing knocked out of them in the financial crisis of 2008/09, households are coming back to the shopping malls. Martin Feldstein, a professor of economics at Harvard University, noted that US personal consumption rose 3 percent in the first quarter over the previous quarter.

Writing on the Project Syndicate website, he said household wealth rose by $10 trillion (R106 trillion) last year. Quoting US Federal Reserve data, he said the increase reflected a $2 trillion increase in the value of homes and an $8 trillion rise in the value of shares, unincorporated businesses, and other net financial asset.

“Past experience suggests that each $100 increase in household wealth leads to a gradual rise in consumer spending until the spending level has increased by about $4. That implies that the $10 trillion wealth gain will raise the annual level of consumer spending by about $400 billion, or roughly 2.5 percent of gross domestic product (GDP). Even if less than half of that increase occurs in 2014, it will be enough to raise the total GDP growth rate by 1 percentage point,” Feldstein said.

In China, consumers have also been out shopping. Chinese households have been traditionally cautious about spending but “the healthy growth of disposable income for both rural and urban residents has made it possible for a continuous growth in overall retail sales”, according to the People’s Daily.

The publication reported last week that findings from global information provider Nielsen showed consumer confidence in the first quarter remained at a record high of 111 points. The level was three points higher than in the same period last year, and well above the global average of 96, according to Nielsen.

In both China and the US the spending patterns are policy-induced outcomes.

“As former Fed chair Ben Bernanke explained when he launched large-scale asset purchases, or quantitative easing, that increase in wealth – and the resulting rise in consumer spending – was the intended result,” Feldstein said.

In China, government policy is shifting from its earlier approach of driving growth through investment and exports to encouraging expansion through domestic consumption. And the policy is paying off. The People’s Daily quoted Nielsen information, saying fast-moving consumer goods sales in the Chinese market rebounded to growth of 8 percent in the first quarter, 2 percentage points higher than in the same period of last year.

The publication noted that the world’s six largest economies all demonstrated consumer confidence gains. Listed by the level of the increase, overall confidence increased eight points in France to 59 points, six points in the US (100), four points in Germany (99), three points in the UK (87), and one point in Japan (81).

South Africa’s consumers are not coming to the party. After last month’s monetary policy committee meeting, Reserve Bank governor Gill Marcus predicted household expenditure would be subdued because of “continued weakness in credit extension, rising inflation, high consumer indebtedness, as well as the knock-on effects of the mining strike, where the cumulative loss of wages is estimated to have topped R8bn”.

There are two sources of economic growth: domestic consumption and exports to other countries. The protracted mining strike on the platinum belt, which disrupts supply and deprives miners of their income, is strangling both.

Until the strike is resolved, the economy faces further contraction after shrinking 0.6 percent in the first quarter. While the rest of the world recovers from the 2008/09 shocks to the global system, South Africa may be re-entering a recession.