The US Consumer Is Back and That Means…

Friday, December 24, 2010

… the US economy is back.

Forget the picture of deflated, fearful consumers keeping their 2/3 of the economy moribund. Normal times are upon us, making the 2011 outlook rosy.

Those months following the late 2008/early 2009 smashup? History. We’re now back on a growth track and beating previous highs.

Consumer sales: Up

“The last-minute holiday surge is heralding the return of the American consumer, who is shedding the recession’s thrifty ways and rediscovering the pleasure of shopping.”

(The New York Times, “Home-Stretch Buying Lifts Merchants’ Spirits,” by Stephanie Clifford, December 22)

[See also my previous write-up: “Retail Sales Indicate a Happy New (Stock Market) Year in 2011,” December 16]

Consumer attitudes: Up

The Thomson Reuters/University of Michigan’ consumer sentiment survey just showed an increase. More important than the actual reading were these two insights from Richard Curtin, the survey’s director:

“The overall tenor of news about recent economic developments was on balance more favorable than at any time during the past six years.”

“Twenty-seven percent of consumers spontaneously reported upbeat news about employment gains, the highest proportion since 1983.”

Haunted by ghosts of recessions past? Begone!

Still worried about the vestiges of the recession? Have faith. The upward cycle is in place. With the positive momentum,  job openings will increase, state & local governments tax revenues will rise and housing will improve.

So… Be ready to focus on the “pursuit of happiness” in 2011. As an investor, a promising way to enjoy the year is by owning some US stocks.

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December 2010