Fears of a double-dip recession is running high, but economic data suggest that they are unfounded. Writing in the Wall Street Journal, Milton Ezrati of the money management firm Lord Abbett explains:
- The consumer is regaining strength: A 1.4% decline in retail sales for May gave rise to double-dip fears, but that was after 10% advance over the past 12 months. Meanwhile, household income is on the rise, and Americans are saving more—suggesting they can keep up current spending while paying down debt.
- Housing: The first-time-homebuyer tax credit crowded purchases into the end of last year, creating the appearance of a dip in the months that followed. But the inventory of unsold homes is dropping fast, and a prices rose by 5.3% in May.
- Employment: Overall unemployment continues to hang around 10%, but hours and temp hiring—the first signs of recovery—have begun to pick up.
To see all of Ezrati's reasons—he has seven—click here