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Investing Specialists

New Look of Recovery: Steady But Slow

Super-bulls and super-bears are both likely to be confounded by the economy's trajectory from here.

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In the ongoing battle between the rose-colored glasses camp, who anticipated a near normal recovery, and the doom-and-gloomers who deny we ever came out of the recession, the optimists managed to tie up the score this week.

The surprise comeback follows a month of data that made it appear the rosy glasses set would go down in certain defeat. Stronger-than-expected payroll data, better manufacturing data out of China and the United States, and better-than-anticipated back-to-school sales helped even the score.

On the real estate front, pending home sales improved, and though it was a little dated, the Case Shiller Home Price Index managed a small gain. July real disposable income was the one weak spots this week, falling 0.1% as a temporary hiatus in extended unemployment benefits, an Illinois construction strike, and the layoff of hundreds of the thousands of census workers depressed results along with a higher-than-normal inflation rate.

Robert Johnson, CFA does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.