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Is the Economy Finally Back on Track?

Eric Dutram

With the strong April jobs report and the large number of positive revisions for February and March, stocks were able to hit fresh highs to close out the week. And even more importantly, the report led many to believe that we might be able to avoid another summer swoon, and that the economy could finally be back on track.

After all, we have seen a number of strong domestic data points lately including:

  • Consumer spending for March that was up 3.5% yoy.
  • Home supplies remain at robust levels while housing prices are increasing, leaving many feeling more confident about their financial position.
  • While not really a data point, stocks are at all-time highs, so at least on this metric one aspect of the economy is definitely at pre-recession levels.

However, every data point hasn’t been rosy over the past couple of weeks as we have seen some weakness in a few key areas. These include the following releases:

  • Factory orders for March came in below the consensus with a -4.0% m/m change.
  • ISM manufacturing finished at 50.7 for April, a miss compared to the 51.0 expectation.
  • International markets: Europe remains weak on a number of levels, while China has seen its manufacturing sector slowdown as well.

So clearly, even with the strong jobs report, we could be facing a continuation of the ‘muddle through’ economy in the near term. But recent figures have definitely been promising, especially on the consumer front, and could suggest a breakout from here…

But what do you think?

Is the economy going to pick up steam, or is this jobs report the last of the good news before a summer slowdown?

Let us know in the comments below!

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