The U.S. economy is showing a stronger labor market, but weakness in consumer spending. The increased rate at which businesses are hiring has also been deterred by the lack of investors. According to Market Watch, some experts are referring to the current economy as a double-sided one.
Federal Reserve Chairman Janet Yellen, recently pointed out that the economy has too many weak areas and that there are too many citizens still unemployed to say that the it's steadily improving, despite the fact that it's growing at a faster rate.
Faster hiring, but less investing
Even though profits are currently at record highs, businesses have still refrained from increasing investment back to levels seen before the recession. There has been little investing in new plants and equipment at faster rates, which would play a major hand in accelerating job creation and increasing the likelihood of faster U.S. growth in the future, according to Market Watch.
In the monthly report on durable-good orders, a key measure of business investment is not predicted to show much improvement in July. Orders excluding defense and aircraft were up by only 2 percent in 2012 and 5 percent last year, and are likely to show similar results this year.
The reports showed that on average, orders for durable goods will see a major increase. However, the forecasted jump is expected to be predominantly a result of a surge in contracts for Boeing BA jets.
Consumer spending remains sluggish
However, consumers, like businesses, are lagging when it comes to spending. Market Watch reports that consumer spending has fallen about two-thirds from the normal amount. This is why the economy has been growing only 60 percent as rapidly as its historical average.
Consumer spending was up by only a very small amount in July, for millions of Americans still find it difficult to believe that the economy is officially back in shape. One product Americans are investing in is new automobiles, buying at the fastest rate since 2006. They aren't, however, as willing to let go of their money on other consumer goods and services.
U.S. stocks rise
Futures on the S&P 500 expiring in September climbed 0.4 percent to 1,996.2 in New York on Monday after the benchmark index gained 1.7 percent last week. Dow Jones Industrial Average contracts were up 64 points, or 0.4 percent, to 17,057 as well, reports Bloomberg.
The housing market is expected to make a comeback. Sales of new and previously owned homes hit multi-year peaks last summer but retreated soon afterward as a result of backed up mortgage rates and soaring housing prices.
Peter Garnry, head of equity strategy at Saxo Bank A/S in Hellerup, Denmark, said in a phone interview with Bloomberg, "There are a lot of positive fundamentals which support further momentum in the housing market. Good housing data would support the view that the U.S. economy is growing quite well."
In Washington, a report is expected to show an increase in U.S. new-home sales to a pace of 429,000 a year in July, a raise from 406,000 in June, according to a Bloomberg News survey. However, according to Market Watch, expectations that sales would soon accelerate have repeatedly proven to be wrong.
On Sunday, contracts from U.S. stock indexes to Treasuries, oil and gold were affected by a multi-hour pause of futures trading on the Chicago Mercantile Exchange due to a technical problem. According to its website, CME Group Inc. suspended all of its Globex electronic-trading markets except for Malaysian equity-index derivatives, reported Bloomberg.
Meanwhile, BusinessWeek reports that the dollar hit an 11-month high versus the euro Monday morning. The U.S. currency gained 0.4 percent to $1.3194 per euro in New York, its strongest level since Sept. 9 of last year.
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