Don't look now, but the U.S. economy is set to record a pretty good week. Almost every economic data point came in above expectations or indicated a positive for the economy, and the stock market is set to record a weekly gain.
Another modestly positive development was registered Friday, when the Reuters/University of Michigan Surveys of Consumers said its final consumer sentiment index for March increased to 57.3, revised higher from the preliminary 56.6 released earlier, and above February's 56.3. The index's record low of 51.7 was set in May 1980. Economists surveyed by Bloomberg News had expected the index to fall back to match February's figure.
Investors need to pay attention to consumer sentiment because it usually precedes consumer decisions to buy or hold off -- and historically consumer spending has accounted for 60-65 percent of U.S. GDP. However, investors should not read too much into the Reuters/Univ. of Michigan index, as it tends to be less of a market-mover than the more closely followed measure published by The Conference Board.
Sensing better days ahead?
Federal Reserve Bank of San Francisco President Janet Yellen sums up the current cautiously hopeful stance by those who follow the economy and the markets.
"While there are good reasons to think the economy could begin to recover fairly soon, I'm far from confident and thus don't want to press the case too strongly," Yellen said in a speech delivered this week before the Forecasters Club of New York.
Economic Analysis: Again, we're choosing to interpret this data point as as a (small) victory. The consumer sentiment index's increase in March is nothing to write or (email) home about, but it does round out a generally positive week for the U.S. stock market and the economy. Further, the positive week has economists, business executives and traders alike starting to whisper the "B" word, as in: Is the U.S. recession starting to form a "bottom"?
With latest consumer sentiment data, a good week just got a little better