Last week’s GDP report certainly allayed conventional wisdom’s fears that the economy was sliding back into recession. The headline number for personal consumption expenditures (PCE) was the clincher since it supposedly showed that the consumer, for all the worry about prices, is back and supporting the consumption economy. Sixty-nine percent of third quarter GDP growth came from additional spending on PCE; 80% of that PCE was due to increases in consumer spending on “services”.
For now we will ignore the alarmingly large 1.7% decline in real disposable personal income and…

More…

Comments are closed.