A higher-than-expected increase in the unemployment rate caused significant panic last week. However, data from the Institute for Supply Management indicated that the services sector expanded in July, while the commerce department data showed initial jobless claims fell.
The stock market also made a modest recovery, partially erasing some of the week’s losses, and Treasury yields rebounded slightly.
While there are numerous indicators suggesting that recession fears may have been exaggerated, this week’s retail sales data will be crucial in alleviating investors’ concerns that a slowdown in consumer spending could drag down economic growth.
Private consumption has been the driving force behind the continued growth of the U.S. economy. Despite some easing in the second quarter, final sales to private domestic consumers grew by a solid 5.1%, down from an even stronger 5.6% in the first quarter. So far, lower inflation has provided a tailwind for household budgets. As inflation eased, real wages increased, delinquencies fell, and bank lending improved – resulting in more favorable conditions for consumers. […]
– Read More: headlineusa.com
