Tokai Corp U.S. Economic Recovery Looks Distant

Nevada, July 18, 2014 (Newswire.com) - TokaiCorp.net - US consumer spending in April surprised investors by posting a 0.1% fall, the first decline in a year. The numbers follow a 1% increase in March, the fastest pace of growth in 5 years.

After factoring in inflation, the data was even worse because it showed that spending had dropped the most since 2009 as income growth eased.

“The pro-recovery camp will have difficulty wheeling out the bad weather excuse to explain away these numbers,” said an Tokai Corp analyst alluding to the tendency for commentators to use the inclement weather that battered the US at the start of 2014 as a means of explaining away poor economic data.

“The consumer spending data wasn't the only black cloud because the University of Michigan’s gauge of consumer sentiment also fell more than forecast registering 81.9 against expectations of 82.5,” he added.

Tokai Corp has maintained its view that the US economic recovery would fail to reach escape velocity and says the latest mixed data will likely continue to deteriorate going into the second half of 2014.

“It’s been a valiant effort but ultimately, there is still an overhang of debt that’s hanging around the necks of consumers like a millstone. Add to that a housing market that can’t seem to gain any traction despite historically low interest rates and the future looks shaky,” continued the TokaiCorp.net analyst.

The firm says it still expects the US Federal Reserve to either pause or even reverse its tapering program by the end of 2014.