With a full set of July indicators in hand, along with a nearly complete set of August numbers, the data is telling us that the economic trend has weakened. But the decline in the trend is nowhere near the danger zone for recession risk. Nonetheless, the 3-month moving average of the Capital Spectator Economic Trend Index (CS-ETI) has dropped modestly for each of the three months through August and so the potential for trouble down the road can’t be ignored in the current slow-growth climate.
Daily Archives: September 28, 2012
Spending & Income Increased In August
Personal income and spending rose in August, the U.S. Bureau of Economic Analysis reports, although the increase on the income side of the ledger was sluggish in nominal terms (and actually fell last month after adjusting for inflation). Personal consumption expenditures, on the other hand, had a much stronger month, rising the most since February. Some of the higher spending was due to rising gasoline prices. Nonetheless, consumers were willing to spend more on durable goods, which suggests that there’s still some capacity to open the wallet for discretionary items. Overall, today’s income and spending numbers suggest that the economy still has forward momentum. If you’re looking for a clear sign that a recession is near (or recently started), you won’t find it here.