Road to Recovery or Cloudy Skies?
The notion that the economy is starting to heal has taken something of a beating in the last two weeks, as economic data have offered a more muddled picture.
Sure, the economy isn’t in free fall like it was over the winter. But for every statistic that offers hope of better times ahead, there seems to be another that suggests the recession will last many more months. This week’s crush of data should offer greater clarity on which story is true.
It kicks off this morning with personal income and consumer spending figures for April. Both are expected to have fallen 0.2 percent. Pay particular attention to the spending figure. Economists’ theories that the economy may bottom out later this year depend on consumer spending leveling off. If personal consumption expenditures for the month are unchanged or even slightly positive, that would be a good sign (but, given weak retail sales numbers for April, don’t count on it).
Other major data this week will give a more contemporaneous read on the economy.
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