Saturday, 10 December 2005

US consumer sentiment, leading index rise, so do debt and maybe recession risk

The US economy continues to throw up positive indicators. Yesterday, we saw the University of Michigan's consumer sentiment indicator for December rise to 88.7 from November's 81.6, according to a Reuters report. The report also mentions that the Economic Cycle Research Institute's leading index for the US economy rose at an annualized growth rate of 1.8 percent, up from 1.5 percent a week ago.

However, Barry Ritholtz at The Big Picture reminds us that the US economy "has been propped up by borrowing and spending, rather than production" and suggests that investors look at "other potential investment opportunities globally".

For more blogging on debt, read David Altig at the macroblog, who traces the rise in household debt, and James Picerno at The Capital Spectator, who cites William Conerly of Conerly Consulting as saying that despite the surge in household debt, the talk of a savings crisis is overblown, that the US economy will grow above 3 percent in 2006, but "the risk of recession will rise next year".

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