(RepublicanDaily.org) – Consumers and the American public are demonstrating their resilience once again as the U.S. Commerce Department released its latest figures for consumer spending, showing a 0.7% jump in retail sales in July, exceeding industry expectations and estimates.
Wall Street only estimated a moderate 0.4% growth in the sector, while Bloomberg’s projections were only at 0.3%.
Commerce also reported that core retail sales increased by 1.0% — soundly beating a 0.4% projection – while import prices saw a 0.4% rebound and were down 4.4% year-on-year. According to the department’s data, American consumers spent the most on hobbies, sporting goods and clothing.
The upside in the performance of the economy has economists and other finance experts revising their projections, with many revising their view that America was headed towards a “mild” recession.
Jerome Powell, Chairman of the U.S. Federal Reserve said that the central bank does not see a recession happening this year given the “resilience of the economy recently.”
Michael Gapen, an economist for Bank of America wrote in a recent report that the company has a more positive “outlook for growth in economic activity this year” and no longer feels that a “mild recession” will occur. Gapen also wrote that his projections “includes stronger growth outcomes” that indicate that the resilient economic activity in the country coincides with “diminishing inflationary pressures and still-low unemployment,” and added that in his opinion, “there is a lot in this forecast for the Fed to like.”
Another financial giant, Goldman Sachs, while estimating that U.S. economy will experience “unspectacular growth,” still lowered the chances of a recession to 20% from its previous forecast of 25%.
The uptick in spending is also a testament to the “strength of the US economy,” Mike Loewengart told CNBC. Loewengart, who heads Morgan Stanley Global Investment Office’s model portfolio construction arm also said that the increase in spending by American consumers was noteworthy given “additional pressure put on the Fed.” The Federal Reserve has instituted historically high interest rates in an attempt to bring inflation down, a move that financial and economic experts said could result in a recession.
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