"After a winter of confusing economic date, some important indicator show an economy coming out of hibernation". Over the past few months, the long winter, showed that consumers and the economy weren't quite as healthy as they should have been. However, now it looks like the economy is finally picking up and shaking off the cold-weather blues:
1. Retail Sales
The Commerce Department has stated that retail prices increase 1.1% in March, which is about what economists were expecting. This increase suggest that consumers have been waiting for the weather to become warm to spend big.
2. New Car Sales
US GD is primarily composed of consumer spending. When shoppers are spending on items like cars, this is a good sign for economic output and ultimately job growth. Automakers announced that they had sold 16.4 million new cars in March, the highest number since June 2006. Here we see the effects of the weather. The recent jump in sales is probably making up for a weak winter.
3. Jobless Claims
Economist track the number of Americans applying for jobless benefits. If this number falls, it is a good sign that the labor market is getting healthier. The Labor Department announced that this number dipped to 300,000, its lowest level since 2007.
It look's like the many months where Economists blamed the cold weather for the slowdown in the economy was true. Based on these three points, the economy is finally picking up where it left off in the Fall.
http://finance.fortune.cnn.com/2014/04/14/economic-recovery-accelerates-as-winter-turns-to-spring/
I think that Winter brings out the worse in people in terms of consumption. People tend not to shop around during the winter compare that to summer. Since summer is approaching, it makes sense that more consumers are consuming more and not holding back their money as much. Also, it makes sense that people are now finding or looking for jobs because the cold is over.
ReplyDeleteI agree with Bien. Everything I have read recently has said that winter is a huge downer for many sales and the economy in general. Especially this winter, because it was so bad everywhere. It is nice to see that the weather is getting better and that more and more people are going out and spending money, thus stimulating the economy.
ReplyDeleteThe weather probably has something to do with economic activity, but I certainly don't think it is the sole influence. The economy has been pulling itself out of a recession for a while now and this seems to just be more of the same in that direction.
ReplyDeleteAs far as the 3rd "reason" for why the economy is looking up, jobless claims dropping is a good thing, it can decrease government spending as decreased claims means less money is being requested. However, one needs to examine it as a side-by-side to the labor force. If one exits the labor force, they are not "unemployed" but nor are they employed. However, it's possible that these benefits do not require seeking employment as a way to gain access, and if that is the case, then yes, it is a definite positive for the economic outlook.
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