..There's a great mismatch between the way people feel about the economy and many of the underlying trends. The sentiment says recession, but much of the underlying data suggest growth.
The Thomson Reuters/University of Michigan measure of consumer sentiment, released Friday morning, showed consumer confidence fell and that consumers' expectations for the future are at their lowest level in 30 years. They're not the only ones worried. Lakshman Achuthan of Economic Cycle Research Institute, perhaps the most reliable forecaster on changes in the business cycle, recently told the Daily Ticker he believes a recession is unavoidable.
And yet the numbers continue to tell the story of a grinding, continuing recovery that, in some ways, appears to be accelerating. Amid the rising gloom, the data flow in recent weeks has generally been positive. Retail sales, reported this morning, were up strongly in September, up 1.1 percent from August; August's figure was revised upwards. Compared with a year ago, retail sales are up 8 percent. They were led by strong car sales. After putting up a bagel in August, the economy added 103,000 payroll jobs in September, including 137,000 private sector positions. Overall GDP growth, which fell dangerously close to flatlining in the first quarter, in which it grew at just a .4 percent annual rate, grew at a 1.3 percent rate in the second quarter. Macroeconomic Advisers, which tracks and continually updates estimates in real time with each new data point, currently has the third quarter expanding at a 2.7 percent rate. The Conference Board Leading Economic Index pushes higher every month.