US Economy - An Update

With Obama’s agenda behind us, or at least stalled, businesses and consumers alike are cheered.

From the Wash Times, “The economic outlook has brightened noticeably in recent days, with a splurge of car-buying by consumers unexpectedly lifting retail sales and businesses putting some of their nearly $2 trillion in stashed cash to work buying other companies with an eye toward growth.”

From Irwin Stelzer in the Weekly Standard, “Nationally, sales at retail shops increased for the fourth consecutive month, and recorded their sharpest gains in seven months. Mid-priced retailers, Macy’s, J.C. Penny, and Kohl’s, report that sales are beating expectations, giving reason to believe that the fears that have kept middle-income shoppers out of the malls are dissipating. New York City’s mid-priced restaurants report that non-rich consumers are once again dining out.”

Bernard Baumohl, an economist at the Economic Outlook Group, said the surge in auto sales is a telling sign for the economy, showing that consumers felt confident enough to take out loans, increase their debt loads and buy new cars for the first time this year.
“Consumers also have been shelling out cash to dine out more, as well as indulge in their favorite sports, hobbies and gambling - key discretionary spending areas that usually do well only as the economy improves,” he said.

Jeffrey Kleintop, chief market strategist at LPL Financial explains that businesses were put off by the sweeping legislative and regulatory reforms enacted by the Democrat-controlled Congress. "Businesses had been hesitant to make the capital commitments to growth" before the elections, he said. Now, "business leaders are more likely to make the commitments to growth that drive the economy, including additional hiring."

Agreed.