>Some Scottish economic analyst was just on CNBC Europe. The
>interviewer asked him about signs of a weakness in the trend
>of consumer spending in the US. The analyst replied that consumer
>spending in the US actually seems quite strong, it is just that the
>consumer is much more selective about where and how much of his
>money he will spend. Further he stated that people are becoming
>more picky about what stocks to invest in or whether to put money
>into the market at all.
>
>He then reaffirmed the strength of the US consumer sector.
>
>HUH?!
>
>Please help me remove my ignorance by explianing his obviously sound logic.
He's more or less right about consumption. It's one of the great mysteries on the economic beat. Household spending barely suffered a recession, with retail sales and housing all holding up quite well (and the housing market even acting bubble-ish in some areas). Car sales have been particuarly strong, though it's taken 0% financing to move units off the lots (meaning the manufacturers aren't making much money, if any). The recession was almost entirely on the investment side, with capital spending and the financial markets leading the way down (and showing few signs of recovery so far).
We'll see if this is the last bubble to burst, or whether the supply side will pick up to match the demand side.
Doug