Still doubt that U.S. economic growth is accelerating?
Take a look at the Philly Fed survey. It provided some convincing evidence earlier this week. This regional manufacturing survey hit the highest level in 33 years—Ronald Reagan was still in the Oval Office. The index’s spike joined upticks in other regional Fed surveys from Dallas, to Richmond, to Kansas City.
One of the more positive aspects of the survey was the pop in company capital spending plans. That has been accelerating for three months now. Prior to that inflection point, inventory investment and core capital investment orders had been notable detractors from U.S. economic growth.
Add this to Retail Sales and Consumer Price Inflation data reported earlier this week:
- Retail Sales – The year-over-year growth rate in retail sales hit 5.6%, a level not seen since March 2012.
- Consumer Price Inflation (CPI) – Core inflation just hit the highest level in 5 years. CPI accelerated to +2.5% year-over-year in January versus +2.1% in December. Inflation has now accelerated for the 6th consecutive month.
WHAT TO BUY
As the U.S. economy continues to accelerate that will benefit the stock market. We say buy the S&P 500 (SPY).