Economy Notches Fitful Gains
Americans are gaining confidence in the nation’s economy, but remain wary that threats could wipe out recent modest progress after three years of fitful recovery. A stream of encouraging economic data in recent weeks—following a slow start to the second half of the year—has eased recession fears while underscoring the recovery’s uneven pace. The University of Michigan consumer sentiment index increased to 73.6 in its preliminary August reading from 72.3 in July and its highest reading since May. Job growth picked up in July and layoffs have eased after a spring spike. Exports—big contributors to the recovery thus far—have remained surprisingly resilient despite recession in Europe and slowing growth in Asia.
The recent signs of an improving outlook could complicate a coming decision for the U.S. Federal Reserve. Officials at the central bank have been concerned for months that the economy is growing too slowly to bring down unemployment. They signaled strongly early this month that they were leaning toward taking new actions to spur growth. With the economy showing signs of picking up on its own, some Fed officials might be more reluctant to move, though the data likely have not picked up enough or for a long enough period to dramatically alter the views of most officials about the outlook.