Tuesday, October 15, 2024
Year : 2, Issue: 7
With a little more than three weeks to go before November’s presidential election, it’s doubtful there are still many voters left to convince. Given that the economy has been a defining issue of the campaign between former President Donald Trump and Vice President Kamala Harris, most minds are likely made up on the issue.
But the question may well be which economy voters weigh more heavily: the one that emerged post-COVID and was defined by rampant inflation, or the current economy that by most measures is in good health.
The strong labor market – employers added 254,000 workers in September – and the latest benign readings on inflation mean working consumers should be feeling pretty good.
The September retail sales report, to be released on Thursday, will offer a good measure of consumer health. Expectations are for a monthly gain of 0.3%. Strong auto sales should offset weakness from gasoline sales, which have been affected by falling prices at the pump.
Housing starts and building permits for September, out on Friday, may show some modest declines following a strong August, though the fact that mortgage rates are lower than a year ago should give a boost to the housing market. Still, the projected annual levels of both starts and permits are below the pace of a year ago.
“On balance, consumers are on firmer footing than previously thought given the upward annual revisions to income growth,” said Sam Bullard, managing director and senior economist for Wells Fargo’s corporate and investment banking group.
“We’ve had a soft landing for some time,” says Beth Ann Bovino, chief economist at U.S. Bank, speaking of an environment in which the Federal Reserve has been able to tame inflation without driving the economy into recession. “We had a risk of a downturn with recession possibilities at 40% last year but now it’s at 25%. But we do expect growth to slow.”
And while inflation has cooled significantly, prices still reflect three years of inflation.
Source: US News
