MacroScope

Economy signs: Better-than-expected means what?

A customer counts his cash at the register while purchasing an item at a Best Buy store in Flushing, New York March 27, 2010.  REUTERS/Jessica Rinaldi Better-than-expected retail sales data eased recession fears today but not by much. The lukewarm reaction from many analysts doesn’t exactly paint a clear picture for the economy.

“I think the number is OK. Sentiment had gotten so negative that a more mediocre number like this isn’t terrible,” said James Dailey, portfolio manager for TEAM Asset Strategy Fund.

Retail sales data beat expectations but an analysis by Anooja Debnath and Emily Kaiser points out that even the expectation water-mark is not as clear as it once was. Economic forecasts are all over the map and the consensus forecast does not necessarily represent what most economists think.

Recent data has taken some pressure off the Fed but with an economy many are viewing as flat, talk of more monetary easing, and how to do it, is swirling.

Turning to the housing market, Barry Ritholtz at The Big Picture is predicting the worst in housing is likely over. Sure prices could fall another 33 percent — but it’s unlikely –because homes are now priced where they should be in today’s market, Ritholtz writes.

Economy signs: Some good news

A sign is pictured on Wall St. near the New York Stock Exchange in New York November 25, 2008. REUTERS/Lucas JacksonA look at the macroeconomic news and its impact on the mood of investors and the direction of the economy. Are we heading for a double-dip recession?

Jobless claims and trade data came in better than expected prompting some investor cheer today.

“We were expecting that things would slow down in the third quarter and start to pick up in the fourth quarter, but now it seems like the slowdown in the third quarter wasn’t as severe as we feared,” said David Sloan, an economist at 4CAST in New York.

Economy signs: Housing a painful recovery

An occupied house sits next to two of fifteen empty lots on Desoto street that are listed on the auction block during the Wayne County tax foreclosures properties auction of almost 9,000 properties in Detroit, Michigan October 21, 2009. REUTERS/Rebecca Cook A look at the macroeconomic news and its impact on the mood of investors and the direction of the economy. Are we heading for a double-dip recession?

The housing market is more closely related to the price of luxury items than staple goods such as food and clothing, reports David Leonhardt in the NYT. This being the case, don’t treat your home like an investment because the forecast is underwhelming.

But all is not doom and gloom in the housing sector. In is blog Jeff Matthews Is Not Making This Up, Mathhews espouses the “Cover Story Syndrome” method of investing. The seeds of a housing market recovery have been planted by this week’s Time magazine cover story on just how bad things are, according to Matthews.