Today’s income and spending update for June was a whole lot of nothing. Literally. Disposable personal income and personal consumption expenditures were both flat last month vs. May. That’s not terribly surprising these days, but it’s hardly encouraging. Perhaps the best we can say is that it’s more of the same. Or, if you prefer, think of it as the latest installment on the new normal, which Pimco’s Bill Gross defines as “deleveraging, reregulation and deglobalization, all of which promote slower economic growth and lower inflation in developed economies while substantially bypassing emerging market countries that have more favorable initial conditions.”
Daily Archives: August 3, 2010
TUESDAY’S READING LIST: 8.3.2010
►Seven Faces of “The Peril”
James Bullard, president and CEO of the St. Louis Federal Reserve Bank: “In this paper I discuss the possibility that the U.S. economy may become enmeshed in a Japanese-style, deflationary outcome within the next several years…I emphasize two main conclusions: (1) The FOMC’s extended period language may be increasing the probability of a Japanese-style outcome for the U.S., and (2) on balance, the U.S. quantitative easing program offers the best tool to avoid such an outcome.”