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Mar 19, 201509:21 AMOpen Mic

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Market and economic update: Small businesses remain optimistic despite weather-related retail declines

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U.S. economic data have been softer to start the year, despite very strong employment growth. Retail sales slowed for the third month in a row, dropping 0.6% in February and falling 2.3% over the past three months.

This is the largest decline since the 2009 recession. February snowstorms in the Northeast are thought to be the primary culprit for slower activity, and the decline in gasoline prices has also slowed sales at gas stations. Small business optimism and consumer sentiment both remain solid positives, along with the strong jobs market. In the near term, it appears consumers have been saving their windfall from lower energy prices, perhaps waiting for greater confidence to deploy their savings. Despite these softer data, we remain confident that U.S. growth is likely to average 2.5% to 3% over the course of this year.

Many market participants have been watching for financial problems in China, led by slower growth and relatively high debt-to-GDP levels. The early slate of February economic data for China indicates growth remains slow, due to slower growth in industrial output and retail sales.

Evidence of stabilization in economic activity seems to be accumulating, with consumer price inflation rising in February after slowing for the past seven months, and money supply and loan growth turning higher after a similar decline.


Mar 20, 2015 10:09 am
 Posted by  Anonymous

Another factor may be Republican moves in Washington. We are primarily a consumer driven economy. A significant portion of those consumers depend on some aspect of the government safety net like medicare which of course is being discussed as being turned into a voucher experiment currently by the Republicans in Congress. Currently medicare is confusing and a mess- most existing government voucher programs are underfunded , support poor quality services and are even more of a mess. Thus I expect that seniors who can will decrease their consumer spending over the coming year.
I would also figure in the cuts to food aid in the drop in the consumer economy. That may not affect farmers who can sell overseas - it will affect grocers who sell to Americans.

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