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August Economic Indicators. 9/16/2004 10:54:59 AM
Factories output has been up (0.9%), but Consumer spending has been down. Business Inventories are up. What does it mean?
Inflation has been fairly stable, but heading toward double the rate of last year. Consumers are already responding to the rapid increase of their Consumer debt, and are beginning to slow their Consumption rate. Fed rate increases mean higher mortgage rates which curtail Housing sales and prices, but also slow Consumer spending. New Unemployment claims have gone up slightly to 333,000.
This Author, highly criticized by some Economists, believes We are about to enter a Consumer Spending Flux--where Consumer constrain their spending to pay down some of their current debt load before major Heating bills loom in December. It must be remembered considerable Health Insurance companies tack new premium increases on policies in the Fall of the year. Utilities have faced a cool summer with loss of revenues, and may think to increase rates before winter. All of this data foreshadows a potentially poor Christmas season. Indicatiions of such a Consumer Spending Flux will show up by Election Day.
Increased Health Insurance premiums will make both Bush and Kerry call for new Health gurantees for the Public. More Deficit will only worsen the economic performance. The performance of the Bush Tax Cut economic incentives will be proven a failure. Such a Flux would mean loss of Jobs, and increase of Unemployment filings. Outsourcing will become an extremely hot issue, and both Candidates will have to face it. The real turblance will start in mid-October. lgl
