Is there cause for concern for the US economy

Strange. By many measures the US is in its best shape since the end of the Great Recession. Unemployment is a seven-year low. Income adjusted for inflation up. Consumers spend more. Car sales are at 10-year high. Gasoline is very cheap. And the housing market perked up after years of malaise.

But concern is growing.

It all began with the stock market. The selloff in late summer caused by the slowdown in the giant Chinese economy. The latest breakthrough came after prospects weakest period for US jobs over three years. US adds at least jobs in August and September by mid-2012.

The latest batch of economic reports this week probably will not offer a sunny view. Retail sales are likely to keep the pace of the last period. Gas prices at the pump have declined about 8 percent last month. Still, Americans are reluctant to spend. "Consumers are more cautious these days," says Jeremy Lawson, chief economist of Standard Life Investments.

Companies remain under pressure from the strong dollar. It expressed concerns about the slowdown in production in the third quarter as companies seek to reduce stocks
Inflation, in turn, collapsed in September as the strong dollar reduced the cost of foreign goods and oil prices again fell. Given all these problems, many Wall Street believe that the central bank will wait until next year before raising rates for the first time in a decade.

"The Fed is more concerned about the global economic slowdown and will likely keep interest rates low for even longer," say economists at Wells Fargo.

Fed itself has also become more pessimistic. Although central bankers still insist that the economy is on solid ground staff Fed trimmed its forecasts of how quickly the US economy will grow in the next three years.

E.Dimitrov JrTrader