by Sasha Cekerevac, Investment Contrarians:
We all know that the vast majority of the American economy is based on consumer spending. Over the past few months, there have been mixed data indicating how healthy the current economic recovery really is. I’d like to reiterate one thing: investors need to focus on consumer spending as an indication of business activity.
Since approximately three-quarters of our economy is based on consumer spending, it’s natural to look at the health of that indicator to determine if the economic recovery can accelerate. While we have seen growth in the housing market and car sales, other sectors don’t appear to be growing much at all.
In fact, according to the Knapp-Track Index, consumer spending at casual dining restaurants fell by 3.5% in July, which was preceded by a two-percent decline in June.
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