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U.S. recovery on track despite European debt woes

U.S. recovery on track despite European debt woes

Better-than-expected economic indicators are pointing to an on-track U.S. recovery, even as European debt concerns cast a shadow over the world's largest economy.
Strong housing, manufacturing and consumer confidence data this week spurred hope about the fundamental strength of the U.S. economy, despite investors' concerns about Europe.
The stream of positive data, combined with earlier numbers showing higher retail spending, came ahead of a government revision yesterday of economic growth numbers for the first quarter.
Most economists expect the government to revise growth upwards to 3.3 percent from the original 3.2 percent as the United States maintains its economic expansion since the middle of last year after a brutal recession.
"Putting the pieces together, we expect to get a reading that the economic recovery, albeit slow, remains on track, but possibly not advancing at the pace some of the more optimistic economists have been expecting," said Frederic Dickson, chief market strategist for D.A. Davidson & Co.
Positive government figures Wednesday for housing - the sector at the epicenter of the financial crisis that drove the economy into recession - and new orders for big-ticket U.S. manufactured goods astounded most economists.
Analysts at Societe Generale said the housing and durable goods data as well as consumer confidence exceeded expectations "by a margin that is increasing, not decreasing, as might be feared as the crisis in Europe hits the U.S. financial markets."
Even the U.S. dollar's rise against the embattled euro appeared not to hurt the competitiveness of U.S. exports.
The crisis has caused the dollar to appreciate by close to 20 percent against the euro since November but the greenback has also depreciated against the currencies of key emerging countries, Societe Generale's Anet Markowska told reporter.
She noted that while U.S. equity markets keep falling due to the European turmoil, gas prices and home mortgage rates have also dropped, benefiting the average American consumer.
Despite the mostly rosy economic data, Americans remain pessimistic about President Barack Obama's efforts to turn the U.S. economy around after one of the worst downturns in a generation, according to a new Quinnipiac University poll.
Although Americans gave a general thumbs up to Obama's performance, they disapproved - by a 50-44 margin - of how he has handled the economy, the poll showed.


Updated : 2021-08-02 21:51 GMT+08:00