On September 30, the Economic Cycle Research Institute announced that the U.S. economy officially entered a new recession. On the following Tuesday, October 4, the Standard and Poor’s 500 Index dropped to 1,074.77, the lowest level of the year.
Since then the index has rebounded to 1,224.58, or 14 percent. Reports of rising retail sales, buoyed by reports that retailers Macy’s and Kohl’s are boosting hiring, have led some to suggest that predictions of another recession are premature. The 85 economists surveyed by Bloomberg estimated that retail sales for September would rise 0.7 percent and instead they rose by 1.1 percent. And the August numbers were revised upward as well, causing Michael Moran, chief economist at Daiwa Capital Markets, to claim, “It looks like we’re going to be avoiding a recession [after all]. Even though consumers don’t feel good, there is job growth going on and that is fueling some pickup in spending.”
But then the Thomson Reuters/University of Michigan results came out on Friday, showing sentiments among those very same consumers dropping in early October to the lowest level in more than 30 years, and their expectations for the future falling to the lowest level since May of 1980.
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