One by one, over the past two years, the gears that make the mighty consumer engine go have been engaged. And the data points to an ironic twist in the trajectory of the U.S. economy. Businesses, which thrived and boomed in the early years of this subpar economy, are now increasingly taking a backseat to increasingly upbeat consumers.
Bill McBride notes that September housing starts were up, hitting a four-year high:
Right now starts are on pace to be up about 25% from 2011.
Joe Weisenthal argues the “big story of the moment” is “the full-on comeback in everything related to consumers and households.”
Clive Crook throws cold water:
The International Monetary Fund has just released new forecasts. Global growth this year, fourth quarter over fourth quarter, is expected to be just 3.0 percent — less than last year’s 3.2 percent, and cut from the already puny 3.7 percent the IMF’s economists were predicting for 2012 last spring. They’ve cut the forecast for growth in the U.S. by 0.3 percentage points, and they now expect the U.S. economy to expand even more slowly this year (1.7 percent) than it did in 2011 (2.0 percent).
Jared Bernstein worries that the jobless rate is “too high to boost workers’ bargaining power and you can see that in the paychecks.” But he believes that “things are slowly getting better and Romney’s claims to the contrary may be drowned out by this reality”:
I suspect there’s NCD—nontrivial cognitive dissonance–between Romney’s portrait of the economy and many people’s experience of it, especially around some of the more tangible aspects, like housing values and mortgage rates.
Via The Daily Dish.