Chain-store sales were solid last week, with key measures on the health of
consumer spending back to levels that suggest that if the trend stays in place, the economy's overall growth rate could inch upward. If so, the chances of a Fed rate cut would shrink further. If the data were to strengthen even more, there might be renewed chatter of an interest rate hike. For this second point, that's a big if.
Data released earlier today by the International Council for Shopping
Centers (ICSC) show that sales increased 0.7% in the week ended Jan. 6 from a week earlier at the 62 retail chains surveyed by the ICSC. The gain pushed the year-over-year gain to 3.4%, its highest level since the week ended Oct. 14, 2006, and not far from the five-year average of 3.6%. Sales had dipped to as low as 1.7% in the week ended Dec. 26, which matched a 3 1/2-year low.
Sales that run close to their long-term trend are high enough to result in new production and hiring. In turn, incomes grow, creating conditions for self-reinforcing economic growth.
P.S. Will you be there when Cramer makes his next move?
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Tony Crescenzi Blog Bond Volatility Holds Near Decade Low 1/9/2007 9:47 AM EST The low level reflects complacency about inflation and the outlook on interest rates.
Tony Crescenzi is the chief bond market strategist at Miller Tabak + Co., LLC, and advises many of the nation's top institutional investors on issues related to the bond market, the economy and other macro-related issues. At the request of the Federal Reserve, Crescenzi is a regular participant in the board's Livingston Survey of economic forecasters. He is also the author of The Strategic Bond Investor. At the time of publication, Crescenzi or Miller Tabak had no positions in the securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Crescenzi also is the founder of Bondtalk.com, a popular Web site covering the bond market and the economy. Crescenzi appreciates your feedback; click here to send him an email.
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