After upward revisions to previously reported data (another reason why government statistics can never be as reliable as market-based indicators such as commodity prices, which have been pointing to relatively strong growth since last July), retail sales are now seen to have surged at a 12% annual rate in the past five months, and they are up 7.7% in the past year. November sales were only 0.3% below their all-time of late 2007. At this rate, December could be the best Christmas ever, and fourth quarter GDP could be substantially stronger than third quarter.
This should put to rest any lingering talk of a double-dip recession, of course. And with the rising confidence that will come with an extension of the Bush tax cuts, the question now becomes how much stronger the economy will be next year.
"the question now becomes how much stronger the economy will be next year."
ReplyDeleteHear, hear. And I think we see sustained equity and property market rallies.
With inflation dead and interest rates low (tons of capital needs a home), this rally could have more legs than a centipede.
OT but earnest q's:
ReplyDelete1. Burton Malkiel in today's WSJ argues for investors allocating more to China stocks. Yet, I am getting wary of China--very weak shareholder rights, an increasingly truculent political leadership. Something doesn;t smell right lately. Comemnts?
2. Bonds. Dump bonds for the meantime? Rates going up?
There is an interesting correlation
ReplyDeletebetween the year over year building
materials,Garden supply and other
supply retail sales number and year over year housing prices. This time the foreclosed inventory
will likely weigh on the relationship BUT the yr over yr
Building material number is +12% and this should support housing prices.
Scott-
ReplyDeletewhat do you make of the rout that continues in the bond market? seems that retail is burned yet again, while Wall St walks away with a nice steep curve to print money. What a shame I tell you, what a shame indeed.