May 4, 2010
Consumer confidence is up. The month of April has been good for retailer signally seven consecutive months of growth. This shows a broadening of the economic recovery. Previously, only the manufacturing sector experienced some level of growth. While it only improved by an average of 0.2 percent, its mere improvement is enough to assure most investors and economists that a solid economic recovery is on its way.
Payroll has seen its biggest increase in four years. Employers are also becoming certain that sales will continue to grow. In turn, this level of confidence will improve customer spending further and employees can even expect higher wages. Electronic stores have done particularly well for the month of April especially because Apple Inc. has launched a highly popular ebook reader – the iPad.
Dean Maki of Barclays Capital based in New York said that, “Retail sales are picking up because of income growth…consumption s going to be a growing at a firm pace through the end of the year.” The economy is experiencing sustainable recovery that can improve all other sectors.
Government Rebates Do Help
The stimulus package last year, to some extent, helped propel the sales of electronics and appliance in April. For example, around two-thirds of the $300 million allotment for rebates (on energy efficient appliances) was released last month. In Florida, the state ran out of rebate funds in three days as customers trooped to the retail stores. In Illinois in Texas, the allotment ran out in a day.
Beyond government rebates though, Americans are starting to spend reason for the simple reason that the outlook is brightening. In April, the Labor Department said that 290,000 jobs were created. This is certainly a positive development for everyone concerned. The key is for the labor market to recover as quickly as possible for growth to the sustained. It will also help stabilize equity and home prices.
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