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Tuesday, September 30, 2014

LIA Monthly Economic Report: July 2014

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LIA Monthly Economic Report: July 2014

The economy has shown encouraging signs of recovery in the second quarter following disappointing first quarter 2014 results.  A variety of evidence suggests that the business sector has improved.  The National Federation of Independent Business's small-business optimism index increased in May to its highest level since September, 2007, before the last recession.  Business inventories have risen sharply and industrial production is up, exceeding expectations.  Consumer spending and the stock market have been solid.  The housing market has been a concern for some time, but recent evidence on new and existing home sales suggests that this sector may be improving as well at the national level. 

Rising prices, especially for beef and produce, may exert a drag on consumer spending.  But this inflation reflects severe drought conditions rather than an economy that is overheating.  Indeed, producer prices have fallen recently.  So the Federal Reserve Bank has room to continue its pro stimulus policies without raising undue concerns over inflation. 

Click here to view the full report.