Jeffrey Kleintop, chief market strategist for LPL Financial, says the economy is in better shape than it looks. Industrial production and retail sales in August both reached their highest levels in a year. Durable goods orders hit a nine-month high. Business lending is in its six month of growth.
The problem, Kleintop says, is that most people don’t feel the economy getting any better. Measures of consumer and business confidence are at recession-level lows. So why the disparity?
“People have lost their faith in policymakers. They believe that, no matter what the current data looks like, that given the failure of Washington to be able to come to an agreement on the debt ceiling, given the downgrade of the U.S., given a number of the critical issues where policymakers have simply failed to act, as they failed in 2008 to effectively avert the crisis. They’re worried that that is an inevitable outcome once again, that we have a broken process in Washington, and that will ultimately dictate where the economic data’s headed.”
Kleintop addressed a Houston gathering sponsored by IBC Bank.