The news cycle, even business news, is often overshadowed by political wrangling on Capitol Hill for two reasons. First, drama (and boy howdy there is drama) is always entertaining; entertainment equates to interest, and interested readers sell newspapers (or rather, web traffic). Second, it is easier to follow the key players and tell a story with narrative sense. In contrast, economic fundamentals are murkier since they represent a million individual choices conglomerated into dry statistics, typically void of narrative drive.
Oh well. We still have to pay attention to the stats because, however boring they seem, the fundamentals matter more than the disproportionate attention to whichever party is in power at the moment. To highlight the importance of all of us here on the ground, just know that national GDP is primarily the result (about 70%) of individual consumer activity while direct government spending represents a minor (17%) part of it. Put simply, what we – as consumers – do is simply more essential to economic and investment health.
So – ignore the noise of the news cycle. How are we doing? In short – pretty good! More specifically, US retail sales rose for the first time in a four months – about 0.6% - with notable bumps in auto sales, furniture, home stores, and electronics. The Federal Reserve presumed the recent slowdown was driven by temporary storm-season weakness and that the economic picture would pick up enough to support their intended two or three additional rate hikes this year. What’s boosting consumer spending? Some combination of low-unemployment, slightly improving wages, and a higher tax refund rates.