Can it be? The bearish sentiment of the US Business Outlook section of BusinessWeek (April 28) is starting to brighten up?
Given the bounce in household spending, it now appears that the weak winter data were distorted by the temporary effects of severe weather, war worries, and higher energy prices, all of which are now turning around. That was true for industrial production, which fell 0.5% in March, after a 0.1% dip in February. Excluding a weather-related drop in utilities output, production fell only 0.2% last month, and all of that reflects a drop in only one sector, auto output. Even there, the return of cheap financing should boost car sales this spring and lift production schedules.
Just two weeks ago we were reading how the end was near (April 14).
THE GROWING CONCERN is that the economy’s weaker-than-expected showing so far this year will continue into the second half. The main worry is consumer spending, which fell in January and February and doesn’t appear to be bouncing back in March, according to weekly store surveys. That suggests that real consumer outlays, as they enter into the gross domestic product data, grew at an annual rate of only about 1% in the first quarter. That would be the weakest quarterly showing for consumer spending in 10 years.
Oh well, now we just need to get through “this sham of a recovery”.