{"id":9903,"date":"2021-10-11T17:57:59","date_gmt":"2021-10-11T17:57:59","guid":{"rendered":"https:\/\/zackspcg.com\/blog\/?p=9903"},"modified":"2022-02-26T13:05:37","modified_gmt":"2022-02-26T13:05:37","slug":"is-the-u-s-economy-set-to-rebound-from-summer-lull","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/is-the-u-s-economy-set-to-rebound-from-summer-lull\/","title":{"rendered":"Is the U.S. Economy Set to Rebound from Summer Lull?"},"content":{"rendered":"\n<p>Macroeconomic headwinds started to build throughout the\nsummer, which was also when the surge of the highly contagious Delta variant\nstarted to take a toll. Many businesses reluctantly delayed office re-openings\nand in some parts of the country, indoor capacity restrictions were reinstated.\nThe travel and hospitality industry largely reported that bookings hit a soft\npatch.<\/p>\n\n\n\n<p>Meanwhile, supply chains have not helped \u2013 product\nshortages, ballooning shipping costs, and backups at U.S. ports have hampered\ninventory restocks and snarled production at factories globally. Everything\nfrom cars to toys to Christmas decorations is in tight supply and starting to\nexperience price pressures. <\/p>\n\n\n\n<p>The effect on U.S. growth was palpable \u2013 consumers trimmed\nspending on hospitality services and travel in July, and supply constraints led\nmany economists to trim GDP growth estimates for Q3. In one notable recalibration,\nthe forecasting firm IHS Markit lowered their Q3 GDP forecast from 7.8% in July\nto 3.6% by late September.<sup>1<\/sup><\/p>\n\n\n\n<p>______________________________________________________________________________<\/p>\n\n\n\n<p><strong><a href=\"https:\/\/go.steadyinvestor.com\/arrow-stock-market-outlook?source=website&amp;medium=blog&amp;term=motm_blog_2021_10_11&amp;content=stock_market_outlook_report\">Are We Headed for Another Economic Rebound? Protect Your Investments in the Meantime!<\/a><\/strong><\/p>\n\n\n\n<p>With questions surrounding the economy and whether a rebound\nis around the corner, do you know that there are things you can do now to\nnavigate through these turbulent times?<\/p>\n\n\n\n<p>No matter the state of the market \u2013 if you focus on the fundamentals instead of fear and media hysteria, you can protect your investments for the long term. To help you navigate this market, we are offering an exclusive look into our just-released <strong><a href=\"https:\/\/go.steadyinvestor.com\/arrow-stock-market-outlook?source=website&amp;medium=blog&amp;term=motm_blog_2021_10_11&amp;content=stock_market_outlook_report\">October Stock Market Outlook Report<\/a>. <\/strong><\/p>\n\n\n\n<p>This report contains some of our key forecasts to consider\nsuch as:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><em>Zacks rank S&amp;P 500 sector picks<\/em><\/li><li><em>Zacks view on equity markets<\/em><\/li><li><em>What produces 2021 optimism?<\/em><\/li><li><em>Zacks forecasts for the remainder of the year<\/em><\/li><li><em>Zacks ranks industry tables<\/em><\/li><li><em>Sell-side and buy-side consensus<\/em><\/li><li><em>And much more<\/em><\/li><\/ul>\n\n\n\n<p>If you have $500,000 or more to invest and want to learn more about these forecasts, click on the link below to get your free report today!\u00a0<br> <strong><br>IT\u2019S FREE.\u00a0<\/strong><a href=\"https:\/\/go.steadyinvestor.com\/arrow-stock-market-outlook?source=website&amp;medium=blog&amp;term=motm_blog_2021_10_11&amp;content=stock_market_outlook_report\"><strong>Download the Just-Released October 2021 Stock Market Outlook<\/strong><\/a><strong><sup>2<\/sup><\/strong><\/p>\n\n\n\n<p>______________________________________________________________________________<\/p>\n\n\n\n<p>Taken together, the persistent pressures on the global\neconomy have led many investors to increase inflation expectations while\nlowering growth expectations, and for some, the outlook for the U.S. economic\nexpansion has soured. &nbsp;I\u2019ve even noticed the\nmore frequent use of the term \u201cstagflation\u201d in the news lately, which describes\nthe scenario of high inflation and low or negative growth. I think these\nworries are overblown.<\/p>\n\n\n\n<p>Households have a record $142 trillion in net worth, wages\nare on the rise, and there are still roughly as many job openings as there are\nunemployed Americans. Consumers are paring spending on big-ticket items, like\nvehicles and furniture, but they are spending more in areas like retail and\nservices. According to one estimate, households have still only spent about 25%\nof 2021\u2019s stimulus payments. <\/p>\n\n\n\n<p>In a sign that spending and\ngrowth remain in an upward trend, personal outlays on goods and services rose\n0.8% in August compared to July, according to the Commerce Department. As you\ncan see in the chart below, U.S. consumer spending has not missed a beat.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2022\/02\/1_pic1-3.png\" alt=\"\" class=\"wp-image-9904\"\/><figcaption> <strong><em>Source: Federal Reserve Bank of St. Louis<sup>3<\/sup><\/em><\/strong> <\/figcaption><\/figure>\n\n\n\n<p>August also saw companies report a strong increase in new\norders for durable goods, such as appliances, computers, TVs, and home\nfurnishings. Even though a late-summer lull may have seen consumers hit the\n\u2018pause\u2019 button on economic activity, businesses are still largely reporting a\nstruggle to meet demand in the marketplace. <\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2022\/02\/1_pic2.png\" alt=\"\" class=\"wp-image-9905\"\/><figcaption> <strong><em>Source: Federal Reserve Bank of St. Louis<sup>4<\/sup><\/em><\/strong> <\/figcaption><\/figure>\n\n\n\n<p>Finally, I remain optimistic about the economic expansion\nbecause of further labor market improvements I see in the coming months.\nSeptember was the first month that the expanded federal unemployment benefits\nexpired, and school re-openings should pull some workers off the sidelines.\nThere is, of course, no shortage of jobs waiting for those who re-enter the\nworkforce \u2013 as I mentioned previously, the number of job openings in the U.S.\nroughly equals the number of unemployed Americans. Wages are also higher. <\/p>\n\n\n\n<p><strong>Bottom Line for\nInvestors<\/strong><\/p>\n\n\n\n<p>If there is one thing I\u2019ve learned about economic expansions\nover the years, it is that analysts are always looking for reasons to doubt the\nexpansion\u2019s resilience. July\u2019s weak retail spending, which showed sales at retailers\nand restaurants falling -1.1%, was enough for many to start calling into\nquestion whether growth would last. A short period of weak growth coupled with largely\nexpected high inflation readings was enough to declare stagflation.<\/p>\n\n\n\n<p>I disagree. In addition to the fundamentals detailed above,\nI would also point out that the economic drag from the latest Covid-19 surge\nwas far more tempered than previous surges, which to me indicates the economy\nand businesses have learned and are adapting. In my view, aggregate demand and\nfuture growth were not lost as a result of the Delta surge but were merely\ndelayed by a few months. I\u2019m adjusting my growth expectations higher for Q4\n2021 and 2022, accordingly. <\/p>\n\n\n\n<p>In\nthe meantime, I recommend that you focus on the fundamentals and facts that can\npositively impact your investments in the long term. Make the most out of this\nmarket!<\/p>\n\n\n\n<p>Our\u00a0<strong><a href=\"https:\/\/go.steadyinvestor.com\/arrow-stock-market-outlook?source=website&amp;medium=blog&amp;term=motm_blog_2021_10_11&amp;content=stock_market_outlook_report\">Just-Released October 2021 Stock Market Outlook Report<\/a><sup>5<\/sup>,<\/strong> will help you do just that. This report is packed with newly revised predictions that can help you base your next investment move on hard data. For example, you&#8217;ll discover Zacks\u2019 view on:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><em>Zacks rank S&amp;P 500 sector picks<\/em><\/li><li><em>Zacks view on equity markets<\/em><\/li><li><em>What produces 2021 optimism?<\/em><\/li><li><em>Zacks forecasts for the remainder of the year<\/em><\/li><li><em>Zacks ranks industry tables<\/em><\/li><li><em>Sell-side and buy-side consensus<\/em><\/li><li><em>And much more<\/em><\/li><\/ul>\n\n\n\n<p>If you have $500,000 or more to invest and want to learn more about these forecasts, click on the link below to get your free report today!<br><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Delta surge and supply chain snags have slowed growth\u2014but the economy still has room to run<\/p>\n","protected":false},"author":3,"featured_media":8874,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[63,71],"tags":[],"class_list":["post-9903","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mitch-on-the-markets","category-private-client-group"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9903","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=9903"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9903\/revisions"}],"predecessor-version":[{"id":10291,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9903\/revisions\/10291"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=9903"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=9903"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=9903"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}