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Economic Data Could Reflect New Optimism

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK (TheStreet) -- Optimism is afoot that economic activity and jobs creation are picking up from the anemic pace that so far has characterized the economic recovery.

Reports about innovative manufacturing and firms bringing production jobs back to America, the boom in onshore oil and gas development, stronger auto sales and profits, and rising stock prices are lifting assessments for 2012.

In January, forecasters expected fourth-quarter growth, when finally tallied, to be a bit better than 3% but for the pace to slow to closer to 2% in the first half of 2012.

Essentially, they reasoned, in the closing months of 2011, consumers increased spending faster than incomes grew; hence, credit card debt and auto loans would crimp disposable income and shopping in the new year.

And the foreclosure settlement between the largest banks and states attorneys general notwithstanding, the hangover of millions of unsold homes would continue to dampen new-home purchases and residential construction -- the latter being a major driver of robust economic recoveries in years past.

However, jobs creation was stronger than expected in December and January, boosting household incomes, and weekly unemployment claims are falling closer to levels associated with a genuinely healthy economy.

By dint of policy genius or good luck, President Obama may be playing a better hand than anticipated going into the critical first months of his re-election campaign.

Tuesday, the Commerce Department releases retail sales. After registering hardly any gain in December -- holiday shoppers reveled around Black Friday and Cyber Monday and then pulled back during the weeks before Christmas -- economists are expecting a robust jump for January of about 0.7% overall and 0.5% net of auto sales.

Higher gas prices will play some role, but gains in retail sales approaching those levels would indicate that 3% GDP growth in the fourth quarter was not a one off, and consumers saw the crocuses before the economists -- what else is new!

Also, much has been made of the overhang in consumer debt from the financial crisis and the housing market collapse, but consumer debt bottomed last April, and it appears that working Americans feel more secure about their jobs and are willing to take out car loans and purchase other durable goods on credit.

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