Bloomberg News/Landov The clouds over the U.S. economy have started to part, but sunny days aren’t quite here again.
Is the sun peaking through the clouds that have been gathering over the U.S. economy? It sure seems so.
Interest rates have fallen and fueled a rebound in auto and home sales. The unemployment rate has skidded to a 50-year low of 3.5%. A key measure of how Americans fell about their own financial health rose to a three-month high. And to cap it off, news of at least a tentative trade deal between U.S. and China announced Friday have pushed stock markets close to record highs again.
More good news could come this week from the sum of retail sales in September. Economists polled by MarketWatch predict sales rose a steady 0.3% during the month.
Consumer spending has the biggest influence of all on how fast the U.S. economy grows and retail sales are a big part of that. Sales of new cars and trucks were strong in September, likely more than offsetting a decline in gas-station receipts tied to lower fuel prices.
Robust car sales tell us a lot about the economy. Buyers only make big purchases when they are confident about their job security and their ability to make their monthly payments.
The evidence suggests that Americans are still fairly optimistic even though the economy is not as strong now as it was in the spring. Consumer sentiment, for example, rebounded in early October, reflecting an expectation that the strong labor market will continue to boost their incomes.
What could be a big help is the first step in broader trade deal between the U.S. and China.