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Mark910 (< 20)

Buen’ Dia’ Aug 5, Another look at GDP and the Consumer

Recs

28

August 05, 2009 – Comments (5)

With futures basically unchanged, we look to Europe, oil, and the dollar and see no clues as to where we sre headed today.  So I won’t guess as I seldom make one day trades any ways.  Instead I will follow up on yesterdays topic of consumer spending.  Yesterday I posted the graph here    [more]     showing consumer spending trailing off while government spending increases.  I ended with the conclusion that for this recession to end it was up to the consumer.  Yesterday we got two conflicting pieces of data to fit into the equation.  In the first comment you will find yesterdays graph in a format to make it easier to see the change from month to month.  I will also discuss the new information from yesterday.

5 Comments – Post Your Own

#1) On August 05, 2009 at 8:43 AM, Mark910 (< 20) wrote:

GDP consumer vs Govt%

The Govt. in this release (http://www.bea.gov/newsreleases/national/pi/pinewsrelease.htm) said that personal income dropped 1.3% while spending increased by .4%.  At first glance this says even though the consumer has less money he is spending more. (as needed per the chart).  Interestingly the chart is in chained 2005 dollars to take out the influence of inflation.  So if we look at the release again we find the Real increase as defined by BEA although not reported for some reason.  Personal income dropped by 1.8% and spending also dropped, but only by .1%.  Conclusion is that the consumer will have to start spending before the Economy improves but with the poor economy he has less to spend.  How much the govt. spends, taking money from the consumer and spending on the economy, remains to be seen but so far that is what is happening.  This perhaps has put the brakes on the economies fall but how much room? is left is in question. Report this comment
#2) On August 05, 2009 at 9:21 AM, binve (< 20) wrote:

Good post again man. And I love the alternate view of the data. Very nice :)

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#3) On August 05, 2009 at 10:16 AM, cthomas1017 (86.87) wrote:

You're on a roll, Mark.  Keep 'em coming! :)  +1

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#4) On August 05, 2009 at 11:00 AM, anchak (99.85) wrote:

Recd!

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#5) On August 05, 2009 at 12:07 PM, 4everlost (29.38) wrote:

Rec #20, great stuff...

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