Stocks and Bonds Are Bullish on the Economy

While unemployment remains high and the housing market weak, many large corporations and the stock market are roaring back to life, a sign to some analysts that economic growth in 2011 may be stronger than expected. Bond investors are growing less concerned about deflation and the prospect of a double-dip recession. Instead, they are betting that inflation will pick up as the Federal Reserve acts to bolster the economy. Economists surveyed by Bloomberg News in October 2010 forecast an average 2.7% growth in GDP in 2010 and 2.4% in 2011. Automobile production is aiding the recovery, CSX Chief Executive Officer Michael Ward said on Oct 13, 2010. There are signs the American consumer may be starting to shop again. Retail sales rose 0.6% in September 2010, following a 0.7% gain in August 2010 that was larger than previously estimated, according to the Commerce Department.