AmiSights 3/3: Breaking Down the Recent Jobs, Spending Reports
It's safe to say that Americans have kept on spending despite higher interest rates and rising prices last year. The proof is in the pudding, with reports of hiring surges and an unexpected increase in consumer spending in January.
But does this signal smooth sailing for the economy? LinkedIn members weigh in on the topic with various reactions.
Neha Sahni, Director-Global Market Strategist and Managing Editor at HSBC, said: "There's no roadmap for the central bank to deal with such strong economic data, despite all the recent hikes. A hotter-than-expected economy is probably not just haunting the Fed but potentially also taunting it. So expect the Fed to remain uber hawkish and maintain a 'higher for longer' policy stance."
Tim Cox, SDR Manager at Omnigo, responded: "What if consumers are putting all of this 'spending' on a credit card, drawing out of their 401ks early, or using the many now popular 'pay-later' options? This doesn't signal a strong or resilient economy to me. Instead, it signals a greater likelihood of a recession when American consumers run out of credit."
Managing director of GlobalData Retail, Neil Saunders, gave the AP a more balanced approach: "The economy is in the middling phase. It's not too hot but not too cold, especially for retail. Things are not booming, but neither have they collapsed."
What do you think? Is the economy headed in the right direction? Or are we still headed for a recession?