#healthy pace

WASHINGTON | US economists optimistic about growth, worried about tariffs

WASHINGTON — The economy should grow at a healthy pace this year and next, though the Trump administration’s trade policy will likely act as a drag, a group of business economists said.

Growth should reach 2.9 percent this year, according to a survey of 51 economists by the National Association for Business Economics, released Monday. That would be up from just 2.3 percent in 2017.

And growth is…

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WASHINGTON | Solid US job growth is likely to be reported for August

WASHINGTON — U.S. employers likely hired at a healthy pace in August, emboldened by brisk consumer spending and an economy that keeps growing steadily.

Economists have forecast that employers added 189,000 jobs in August and that the unemployment rate dipped from an already-low 3.9 percent to 3.8 percent, according to data provider FactSet. That would be nearly the lowest rate in 50 years.

That level of hiring would slightly exceed the pace in July, when employers added 157,000 jobs. The expected gain for August would be a solid one, though below the average increase over the previous six months of 220,000 jobs.

The Labor Department‘s August jobs report will be released at 8:30 a.m. Eastern time Friday.

The economy is expanding steadily, fueled by tax cuts, confident consumers, greater business investment in equipment and more government spending. Growth reached 4.2 percent at an annual rate in the April-June quarter, the fastest such pace in four years.

Most analysts have forecast that the economy will expand at an annual pace of at least 3 percent in the current July-September quarter. For the full year, the economy is on track to grow 3 percent for the first time since 2005.

Consumer confidence rose in August to its highest level in nearly 18 years. Most Americans feel that jobs are widely available and expect the economy to remain healthy in the coming months, according to the Conference Board’s consumer confidence survey.

The buoyant mood is lifting spending on everything from cars to restaurant meals to clothes. Consumers’ enthusiasm is even boosting such brick-and-mortar store chains as Target, Walmart and Best Buy, which have posted strong sales gains despite intensifying competition from online retailers.

In August, factories expanded at their quickest pace in 14 years, according to a survey of purchasing managers. A manufacturing index compiled by a trade group reached its highest point since 2004. Measures of new orders and production surged, and factories added jobs at a faster pace than in July.

Not all the economic news has been positive. Higher mortgage rates and years of rapid price increases are slowing the housing market. Sales of existing homes dropped in July for a fourth straight month.

And wages are still rising only modestly, even after more than nine years of economic expansion and an ultra-low unemployment rate. Many economists also worry that President Donald Trump will soon follow through on a threat to impose tariffs of up to 25 percent on $200 billion of imports from China. That would be in addition to $50 billion in duties already imposed. That move could shave as much as a quarter-point off growth over the next year, Mark Zandi, chief economist at Moody’s Analytics, has estimated.

For now, there’s little sign that companies are worried enough about a trade war to slow hiring. Businesses are increasingly reluctant to even lay off workers, in part because it would be difficult to replace them at a time when qualified job applicants have become harder to find.

On Thursday, the government said the number of people seeking unemployment benefits — a proxy for layoffs — amounted to just 203,000 last week, the fewest total in 49 years.

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WASHINGTON | S retail sales rose at robust 0.5 pct. annual rate in July

WASHINGTON — Americans shopped at a healthy pace in July, buying more cars, clothes and appliances, evidence that consumers are helping drive robust economic growth.

Retail sales rose at a 0.5 percent annual rate in July, after a 0.2 percent increase the previous month, the Commerce Department said Wednesday. June’s increase, though, was revised lower from a previous estimate of a 0.5 percent annual rate.

Consumers appear to be feeling upbeat and are in overall solid financial shape. The unemployment rate is near an 18-year low. And economic growth, along with hiring, has accelerated. On average, Americans are saving more, which may encourage future spending.

Sales last month rose at auto dealers and grocery stores and jumped at clothing shops. Americans boosted their spending at restaurants and bars at a 1.3 percent in July from June. Gas station sales increased at a 0.8 percent annual rate from a month earlier.

Spending at restaurants and bars has jumped nearly 10 percent from a year earlier. That’s a bigger increase than for online shopping, which rose 8.7 percent from a year ago.

It also bolsters the notion that many Americans feel they have enough money to spend on non-necessities.

“Restaurants are a highly discretionary category, and continued strength suggests that households are not too worried about higher gas prices and that tax cuts are providing a cushion against higher expenses at the pump,” Ellen Zentner, an economist at Morgan Stanley, said in a research note.

Department stores, which have suffered falling sales and bankruptcies for much of the past two years, reported a surprisingly healthy sales gain of 1.2 percent. Macy’s said Wednesday that sales at stores that have been open for at least a year rose unexpectedly in the quarter that ended Aug. 4, its third straight quarterly gain.

The solid spending figures coincide with other data suggesting that American households are in decent financial shape. The government last month revised the savings rate sharply higher, to 7.2 percent in the first quarter from 3.3 percent. And fewer people are falling behind on their loans.

More savings could fuel future spending growth. Before the data was revised, some economists had worried that consumers would have to cut back on their shopping because the savings rate was declining.

“It gives us comfort that consumers are nowhere near to being as overstretched as they were in the years heading into the Great Recession,” Michael Feroli, an economist at JPMorgan Chase, wrote in a research note.

The savings rate is the difference between all Americans’ income and spending and is skewed higher by greater saving among higher-income households.

A separate report Tuesday by the Federal Reserve Bank of New York showed that Americans are borrowing more even as interest rates rise. That is a sign of confidence that households can pay off the debts. Higher credit card debt and more mortgage and auto loans drove the increase.

The report showed that Americans are paying off the loans. The percentage of borrowers falling 30 days or more behind on loan payments declined slightly to 4.5 percent, down from roughly 6 percent four years ago.

Still, U.S. households are facing some headwinds. Higher gas and housing costs lifted inflation to an annual rate of 2.9 percent in July,

the highest in six years. That more than offset the average hourly wage gains of 2.7 percent that Americans have received in the past year.