April retail sales continued to rise over the year, leading to a 10 percent annual growth rate. Strong retail numbers bode well for consumption, said analyst Chris Low of FTN Financial. Industrial production also rose last month as companies bought more equipment to invest in their productivity. Low said this would eventually lead to more jobs, as more equipment leads to more manufacturing, and that job growth would add fuel to a growing retail sales fire.
But markets were still down at the morning open despite the promising figures. Low attributes the trouble to the continuing debt crisis in Greece, despite the recently approved trillion-dollar bailout of Europe. “The reason it’s affecting us in the U.S. is fear of fear,” he said, “the idea that investors might be scared off and starve the economy of capital.” Low was confident of a continued economic recovery in the U.S. in the face of international investor worry, siting the U.S.’s Gross Domestic Product acting largely independently of overseas activity, along with today’s strong signs for consumption. “We’re still an economy that’s driven domestically,” he said.
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