American consumers haven’t quit spending. They may not be doing as much of it in department stores as they once did, but the Commerce Department’s April retail sales data and a consumer sentiment report combined last week to produce some of the best news the economy has received this year.
Few important economic reports are due this week and we’ll have to wait until Friday to see them, but we should pay close attention to retail sales data for April and the University of Michigan’s preliminary Consumer Sentiment Index for May.
There are few economic indicators more telling than home purchases. When sales are rising, they confirm that consumers have money to spend, they feel secure in their jobs and they’re optimistic about the future.