December 21, 2007

Meanwhile, While We’re Waiting for the Recession That’s Just Around the Corner

Filed under: Economy,MSM Biz/Other Ignorance,Taxes & Government — Tom @ 2:37 pm

If the economy is so bad, where are people getting all this money to spend? (HT Weapons of Mass Discussion)

The Commerce Department said consumer spending jumped 1.1 percent in November, the biggest one-month gain since 2004 and well above analyst expectations for an 0.7 percent increase.

Oh, and I’m not buying what AP is selling:

Oil prices rose Friday after the government reported that consumer spending surged last month, raising hopes that the economy will weather the crisis roiling credit markets and that demand for oil and gasoline will strengthen.

….. Light, sweet crude for February delivery rose $2.08 to $93.14 on the New York Mercantile Exchange.

A one month report from one country changes the price of a commodity traded worldwide by over 2%? Doubtful.

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7 Comments

  1. As usual, I blame Bush…

    Comment by Matt Hurley — December 21, 2007 @ 5:46 pm

  2. With spending rising at a faster rate than savings, the nation’s savings rate dipped into negative territory in November at 0.5 percent. That meant that households spent all of their incomes and either dipped into savings or borrowed to finance the higher level of spending last month.

    http://cbs2.com/national/consumer.spending.november.2.615750.html

    http://online.wsj.com/article/SB119824347009245125.html

    Comment by Robert Stevens — December 21, 2007 @ 9:54 pm

  3. #2, the savings rate number seems to quietly have been revised upward about 6-12 months down the road lately, with little fanfare. I specifically remember a negative number that got a lot of notice at the time being revised to positive about 6 months later. I want to get around to the details on this “eventually” (ugh).

    Comment by TBlumer — December 22, 2007 @ 12:55 am

  4. Obviously, this is not the worst economy since Hoover (and who in the heck ever said that). The markets rose on Friday (quadruple witching day), and if they continue the trend through next week and into a few days of the New Year, then 2007 will enter the books as impressive. Though it would not be as impressive as it would have been if the year ended in early October. Matt and Tom, I think many are wondering, and some are deeply concerned, that there is a recession just over the horizon. If there is, then clearly this is not the time to even think about raising taxes at the local, state, or national levels (I don’t know if there is ever such a time).

    Comment by Bill Sloat — December 22, 2007 @ 9:32 am

  5. [...] Any Day Now, there will be a recession. Filed under: Business by — Dave @ 2:26 pm [...]

    Pingback by NixGuy.com » Just You Wait — December 22, 2007 @ 2:27 pm

  6. #4, “I don’t know if there is ever such a time.”

    Then why does your blogging lean left, Bill? (Yes, it does)

    You are right that the stock market is on the cusp of a decent year. DJIA is up 8% from 1/1 roughly, and 12% from early March. But while S&P is only about 3% and 7% in the same time frames, NASDAQ is about 12% and 14%. Overall, decent but not great, but it’s interesting that the techy NASDAQ did the best.

    I don’t see signs of a recession, except for one: a lot of people are trying to convince us that one is coming, and in some cases almost presumptively assuming that we’re either there, or close to it.

    Oct. and Nov. reports have shown no indications of problems, except that they are a bit weaker than 3Q reports were. But the econ grew 4.9% in 3Q. I think 3Q will be 3%, maybe higher.

    Comment by TBlumer — December 22, 2007 @ 3:43 pm

  7. Hi Tom –

    I probably do lean left. I have never hidden the fact that I hold views that are slightly left of center. That means I probably am not a fan of large institutions — be they government, corporate etc. Perhaps I am some combination of small “d” Democrat with a mix of Libertarianism and the old-fashioned main street Republicanism. Tom, if you believe that because I lean left — and thus must favor all taxes and all tax increases — then you are mistaken. I think they are many issues we agree on, and some where we diverge. But I do think you are an excellent blogger and a first-rate intellect.

    Comment by Bill Sloat — December 22, 2007 @ 5:17 pm

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