Economists estimate that retail sales increased at a faster pace last month, while the U.S. housing market saw some improvement as the economy recovers.
According to the median forecast of economists surveyed by Bloomberg, purchases at retailers rose 0.8%, the highest in four months. May also saw a 0.6% climb. Household wealth and the labor market are both on the rise, leaving Americans less hesitant in their spending. Cars and trucks were purchased at the fastest rate since 2007.
Millan Mulraine of the U.S. rates research at TD Securities USA LLC explained: “The transition from a soft patch to a more sustained rebound is slowly beginning to take shape. The underlying tone of retail sales is encouraging. The positive momentum in housing will continue. Manufacturing has stabilized.”
Jenny Lin of Ford added, “Economic indicators continue to improve.” The “consumer spending growth pace is slowly picking up.”
According to shipping minister GK Vasan, the Indian government has come up with a plan to boost its country’s economy after its most recent slide, with the help of the infrastructure sector.
“Lately, sustainability of a high growth rate has been a subject of much discussion, especially in the wake of the 2011-12 GDP growth rate falling to 6.5%, which was the lowest in the last nine years,” he said.
Still, for the global situation, 6.5% isn’t too bad.
“Notwithstanding the current dip in growth rate, the economy is expected to bounce back and resume its high growth trajectory. We need to either ride the tide when the economic growth is high, or invest to spur the growth itself. We need to seize this moment,” he said.
The U.S. economy’s growth is expected to slow somewhat at the start of 2012, following a burst of rapid growth during the fourth quarter of last year. According to the USA TODAY’s survey of economists, the current state will keep unemployment rates at around the same place they are now.
The survey continued, explaining that the economy will grow at approximately a 2.2% annual rate during the first half of the coming year. The government will release reports on fourth-quarter GDP later this week.
Diane Swonk, Mesirow Financial chief economist, explained that the slower growth will result from the fact that last year’s bounce-back won’t be able to maintain itself. She said: “The little improvement we saw was partly catch-up; the retail recovery at Christmas was more hype than reality. Consumer confidence is still at recession levels, just not at depression levels.”
Still, there are some positive sides to the upcoming year. The risk of an additional U.S. recession is decreasing significantly, while the debt crisis in Europe will only affect a quarter of a percentage point in America’s growth this year.