Many economists and general news reporters have been bumping up their own numbers with gloom-and-doom forecasts. But consumer finances have been doing well. The current dichotomy is that when questioned about the economy, Americans are generally negative. However, they are optimistic about their own finances.
And there are some substantially bright spots in the economy. CNBC reported advance retail sales were “better than the Dow Jones estimate:”
‘Advance retail sales increased 1% for the month, better than the Dow Jones estimate of a 0.9% rise. That marked a big jump from the 0.1% decline in May, a number that was revised higher from the initial report of a 0.3% drop.’
Retail sales went up one percent last month. Predictions were at a 0.9 percent increase, so there was that unanticipated gain. And it gets better.
The Economist invited professor Kathryn Judge from the Columbia School of Law to write an article. She is an expert on financial markets, financial regulation, and regulatory architecture. She said that “systemic fragility is a choice made through design:”
‘Long, complex supply chains and the information gaps within them are exacerbating the impact of recent shocks and leaving policymakers in the dust. The good news is that, since the financial crisis, policymakers and banks have worked together to produce a far more resilient banking system.’
Judge continued, asking for “changes in the financial system:”
Despite meaningful differences between the financial sector and the rest of the economy, and a far more modest role for government oversight outside of finance, changes in the financial system provide a blueprint for the types of changes that could help the economy better weather the next storm.’
The Commerce Department showed consumer spending up and retail sales were up “slightly more than expected.” Consumers have been resilient, too.
In spite of the economic news, markets rallied with the Dow Jone Industrial Average jumping 470 points in just the first half hour after the bell.
Economics, business, and data reporter for the New York Times Ben Casselman said:
‘Interestingly, voters feel better about their own finances than about the economy writ large. 43% say their finances are “good” or “excellent.” Even among those who said the national economy was “poor,” a third said they were doing fine personally.’
President Joe Biden has also managed to bring the price of gasoline down 50 cents per gallon in the previous month, which was no small feat given how limited the Executive Branch is in many respects. And oil prices also declined in the first half of July.
Dental care rose the most since “at least. 1995.” With much of the work done stateside, a question remains whether these increases were reasonable or not.
The New York Fed reported positively about manufacturing. Its Friday report provided good news in spite of supply chain problems, which have been responsible for driving inflation:
‘The Empire State Manufacturing Survey for July posted an 11.1 reading, representing the percentage difference between companies seeing expansion versus contraction. That was much better than the Dow Jones estimate for a minus-2, and reflected big gains in shipments, a welcome change considering supply chain problems that have helped drive inflation.’
The Fed Governor Christopher Waller said it would continue to fight inflation with rate increases tied to retail sales.
The American public is the key to a positive swing in the emotionally volatile markets.
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