One month ago today, I mentioned on this segment that the market was sending out a clear signal: it’s not convinced a recovery is here…And the same message holds true today...because the latest economic data continues to be about as dull as this year’s early fall foliage.
· This morning’s personal income results for August were disappointing and the small increase in spending was due only to government gimmicks like “cash for clunkers” and first-time homebuyer tax credits.
· Consumer confidence in September was down, with most people feeling worse about job prospects and income growth. Buying plans for both cars and homes are also down.
· Consumer prices have fallen for six straight months, clearly indicating a lack of demand.
· Although the revised GDP number yesterday showed the economy slowing by only 0.7% in the second quarter, the best performance in more than a year, it was not due to new fundamental strength.
Fed Chairman Ben Bernanke will be testifying this morning before a House Committee about financial market regulation. This is a long overdue discussion, particularly about derivatives trading and the dangerous credit default swaps.
Depending on what he has to say, this could be the best news of the week. And while it won’t make for a sustainable recovery, it could turn over a new leaf in making Wall Street more transparent. The upshot of this week’s data is simple: the New England foliage will be far more vivid than the economy for quite a while.
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