The U.S. Consumer Is Back in the Driver's Seat
Three pieces of data this week suggested the May/June slowing in reported retail sales was indeed some type of statistical fluke.
The economic data this week was surprisingly positive with fantastic news on the consumer, continued improvement in the real estate market, and a positive revision to the GDP. However, almost all of it was lost on investors, who played a game of will-he-or-won't-he with Ben Bernanke and QE3.
Ultimately, Bernanke promised more action as the economy dictated, then indicated he thought the economy still faced a lot of threats and was quite soft. Connecting the dots, investors took the two separate statements as a quasi-promise of more relief of some type in the near future. Bernanke also made a defense of his unusual and unprecedented programs to buy bonds and lower interest rates.
Robert Johnson, CFA does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.