Retail sales, even before the holiday spending kicked off, were stronger than expected in September and October, and consumer confidence measures have also beaten expectations. A closely watched manufacturing survey, the ISM, showed that new orders less inventories (a measure of real growth as opposed to stock rebuilding) have perked up. Jobless claims are coming down and real disposable incomes bounced in October.
There are plenty of headwinds. Perhaps the most important of these is the failure this week of America's politicians ? again ? to come to an agreement on a deficit reduction plan. The key consequence of the still yawning gap between the Republicans and Democrats in Congress is that payroll tax cuts and unemployment benefits ? worth more than $160bn (�104bn) together ? could expire at the end of this year. The effective fiscal tightening implied by this could knock a big hole in expected growth. It would also result in the unusual situation of taxes increasing in a presidential election year.
The second cloud still hanging over the US economy is housing. The 5m existing homes sold in the year to October fell a full 1m short of the amount thought to equate to a healthy market. The overhang of unsold properties could take years to clear despite a far greater fall in house prices than we have yet experienced over here. And unemployment remains uncomfortably high despite the apparent turn for the better recently.
On the bright side, the corporate sector is surprisingly healthy. During the third-quarter reporting season, a majority of companies beat expectations and the average earnings per share reported was higher than predicted at the beginning of the season. Goldman Sachs's estimate for earnings growth next year for the constituents of the S&P 500 is down on this year's 17pc but, at 11pc, is strong enough. Businesses are also beginning to dust off spending plans again, with fixed investment by companies rising at an annualised rate of 15pc in the past two quarters. The US has been the most resilient of the world's major equity markets this year but it has still been relatively disappointing. As a consequence, shares in the biggest companies are on average trading at less than 12 times earnings. Valuations are back to where they were 20 years ago when the dotcom bubble wasn't yet a twinkle in investors' eyes.
The key reason to prefer the US today, however, is the commitment of the Federal Reserve to providing economic stimulus when necessary at a time when the hope that the European Central Bank will do the same in Europe looks ever more forlorn this side of a market catastrophe. If you believe that high quality, defensive stocks with an exposure to faster-growing emerging markets will be the safest haven in a difficult investing environment then the US remains the best place in the world to go looking for them.
Tom Stevenson is an investment director at Fidelity Worldwide Investment. The views expressed are his own. He tweets at @tomstevenson63
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