Most Economists Agree: Recovery Gaining Momentum

Last week, nearly every article and report in the news claimed or suggested that the pace of the U.S. economic recovery is gaining momentum. Economic Forecasters are considering reassessing their previous thoughts as we see positive statistics like a rise in Retail Sales by 1.1%, and the Consumer Price Index's increase of 0.7%.  However, some argue that these were mostly due to higher gasoline prices and building material prices.

Despite mostly positive claims, it appears as though the economy has felt the effects of the expiration of the 2% Social Security tax holiday, sequestration, and higher gas prices. These issues have fallen squarely on the shoulders of middle- and lower-income households who already have a limited amount of ways to cut spending in the short term.

Aside from these particular struggles, the overall opinion is that the recent economic data has indeed been strong. The most significant data includes housing reports such as Housing Starts & Building Permits, and Existing Home Sales.  Investors are interested in how the Fed will react to it and they wonder whether it will have an affect on monetary policy.

Posted in: economic growth,economic recovery,gas prices,housing reports,sequestration,social security tax