It’s Just Not That Bad!

Wall St. Journal, February 26, 2016

“The U.S. economy started the year on a stronger footing than it ended 2015, suggesting American consumers are brushing off market jitters about plunging oil prices and slowing global growth.

Consumer spending grew in January at the fastest clip in eight months, new data showed Friday, as a strong job market and robust wage gains boosted Americans’ propensity to spend. Inflation also ticked higher, a positive sign for Federal Reserve officials considering whether the U.S. economy can withstand higher interest rates.

The pickup followed other improvement across the economy in January including stronger retail sales and home purchases. A report Thursday showed new orders for big-ticket durable goods also increased last month following their worst annual performance since the recession, suggesting the U.S. manufacturing sector could be on the mend.

Resilient U.S. economic data in recent weeks contrasts with volatility in global financial markets, unsettled by concerns over China’s economic slowdown and steep declines in commodity prices. Fears about jitters translating into a U.S. recession have yet to hit many underlying economic fundamentals.”

Just a few weeks ago, the financial markets were fretting over just how bad the economy is. Once again, ‘they’ get it wrong.