Sometimes the economy is what we think it is. In April, the University of Michigan's preliminary index of sentiment, which climbed to an eight year high, showed that many Americans are feeling better about what the nation is doing. This is an important macroeconomic variable.
The economy grew at just a 0.2 percent annual rate in the first quarter. That was down from the pace seen in the second half of 2014.
When things seem good, consumers loosen the purse strings and spend money. Gas prices, which more than doubled from 2008 to 2014, dropped back enough to make Americans feel like they had more disposable income. Labor Department figures also show a small gain in hourly pay during the first quarter. Retail sales, on the other hand, have not reflected these improvements and have fallen short of economist's expectations.
Then, there is always the possibility of the Fed raising interest rates. Fed members have speculated that they would be willing to pull the trigger as job numbers improve. The jobless
claims have captured some recent headlines and appear to be falling. The reported figures do not include those who have left the workforce and who can no longer file new claims for benefits. These people, who are still of working age, may be permanently out of the workforce.
The Rest of the World
How does the U.S. economy compare with its neighbors over the pond? By one measure, not as good, and by many others, much better.
The U.S. Economy; Rebound In a Global Economy