Dividends and US retail boom eases economic fears

In the middle of the month, US Commerce Department releases information concerning the last month activities. One of the most anticipated reports is the US retail sales which because the consumer is 2/3 s of the US economy, how consumers are spending is a major concern. In an article by Lucia Mutikani of Reuters, the report showed consumers went on a spending spree., although motor vehicle sales were down.

The President cheered the sales and vowed the America First plan was working, even though most of the items at the shopping mall are not made in America, they are retailed in America. Financial markets are expect a 1/4 or 25 basis point decrease in interest rates at the September 17-18 policy meeting of the Fed.

The solid retail sales was also reflected in higher profits for retailers such as Wal-mart which raised its earnings for the year. Wal-mart was helped by a strong on line sales.

On the manufacturing side, output has declined more than 1.5% since December. Manufacturing makes up 12% of the economy is also weighed down by higher inventories. Employment continues to decrease by the manufacturers, although the increasing use of robots allows for output to continue.

The economy grew at 2.1%, down from 3.1% in the previous quarter.

Auto sales were down 0.6% after rising 0.3% in June. On line sales increased by 2.8%, after rising 1.8% in June.

Linking to dividend paying stocks, similar to all economic data there are good things to see and areas of concern. Rarely do you see everything going on full cylinders, so you can ask yourself are you better off? is the country better off? Will the people you see still continue to shop at a healthy pace or wait for Thanksgiving and Christmas?

There are more questions than answers, till the next time – to raising questions.

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