First came the news that unemployment had dropped below 8 percent for the first time in years, and then reports that wholesale inventories have risen as well. Now, as the Wall Street Journal reports, retail spending is rose by one percent in September, marking the third consecutive month of increases. Increasing consumer confidence may finally be translating into a measurable boost for the economy.But, as always, there’s reason to doubt whether this recent boomlet will last. Many analysts warn that there is only so much that can be gained through consumer spending alone, and while the retail sector may be improving, others are still struggling:
The rise in consumer spending comes despite a dimming global outlook that has dragged down exports and hurt manufacturers. That is a reversal from earlier in the recovery, when the factory sector drove growth while consumers, saddled by debt and facing high unemployment, held back.“The domestic economy is doing better even as the export side is weakening,” said Jim O’Sullivan, chief U.S. economist for forecasting firm High Frequency Economics.
Nonetheless, the recent spate of good reports is certainly positive. At at time when good news like this is so hard to come by, we will enjoy it while it lasts.