Data Boosts US Economic Outlook
Economic Data Boosts US Outlook
American consumers may be feeling better about the economy. The Commerce Department says overall retail spending exceeded expectations in September as consumers spent more on electronics goods and cars. A recent string of positive data bodes well for the all-important holiday shopping season.
An improving job picture, better than expected earnings on Wall Street and signs of recovery in the troubled housing market are helping to lift American consumer confidence.
Many opened their wallets in September, boosting retail sales 1.1 percent -- and giving retailers an early start on the holiday shopping season.
Economist Cary Leahey says electronics led gains, with the launch of Apple's newest iPhone lifting sales in that sector - 4.5 percent.
"I've even seen people say out loud Christmas came early, I bought myself an iPhone. So I think Christmas has come early, and it's off to a very good start," Leahey said.
Higher gasoline prices also contributed to the increase in consumer spending - which accounts for nearly two thirds of the US economy. Americans also bought more cars and spent more money on food and drinks.
That could prompt companies to restock store shelves at a faster rate ahead of November's Black Friday - a day that traditionally marks the start of the holiday shopping season.
And this year, Retail Strategist Clementine Illanes says companies are paying greater attention to customer preferences.
"They are getting better at really understanding their customers. So really mining data, looking at analytics (statistical analysis) to be able to target their customers much more uniquely depending on what that specific customer is actually looking for," Illanes said.
But while the economic data is encouraging, Hong Kong investor Jackson Wong says it's too early to make assumptions.
"One-month data doesn't indicate too strongly. However when we look at export data from China was increasing and the U.S. data - retail sales data-- was increasing, that means the economy activities are picking up," Wong said.
The increase in retail spending has prompted some economists to revise growth estimates from 1.6 to 2 percent in the third quarter. Some say sales of the new iPhone 5 alone could add one third of one percent to U.S. gross domestic product from July to September.