[Leanan]

Trick, says Kathleen Hays.

The stock market jumped this morning, on news that personal income and spending increased last month.

But a closer look revealed that this is not really good news. The income increase was insurance payouts due to the hurricanes. And the increase in spending was due to inflation - higher energy costs.

$this->bbcode_second_pass_quote('', 'N')EW YORK (CNN/Money) - Hurricanes can bury a lot of things, but don't let them bury a very important nugget in Monday's personal income and spending report: the consumer fell off a spending cliff in August and September!

[NeoPeasant]

Bad Consumer! Shame on you! Spend more!

[Nano]

Hays is sharp as usual. At the end of the day the DOW took back much of its gain. I'm betting on a further decline tomorrow but you never know. Dark forces are at work. Quite a few people are now talking about the traditional "end-of-the-year rally". I'll see it to believe it. The Wall of Fear has got to give sometime.

[DantesPeak]

Leanan - you have the ability to predict news stories!

Is the Department of Commerce playing a trick on us?

$this->bbcode_second_pass_quote('', 'P')ersonal Income Report: A Trick or Treat?
by Charles Mackay, Monday October 31 2005

Is today's report on personal income from the Department of Commerce a cruel trick foisted upon unsuspecting investors - or a treat to be savored?

One analyst after another trumpeted the Personal Income report from the Department of Commerce's Bureau of Economic Analysis as 'good' news. Yes, personal income was reported to have grown a large 1.7% in September, bouncing back from a drop in August. Primarily business analysts stated the report was good because income had grown faster than expected. Never mind that even with this ‘good’ news, personal income is still falling behind the rate of inflation.

...

Obviously the effects of hurricanes on the economy can, and still are, affecting the measurement and quality of economic reports. One quirk in the BEA's computation is that is counts expected insurance recoveries from hurricane damage benefits almost right away. The experience of many in these disaster areas is contrary to that assumption.

...

So what's the verdict - trick or treat? You decide.


Monday October 31, 06 57 PM ET
Copyright (c) 2005 The Wall Street Examiner. All rights reserved.

[FoxV]

I love how in Leanan's link the salvation to all of this is good employment figures

$this->bbcode_second_pass_quote('', '"')Consumer spending is unlikely to slow by enough to materially harm the overall economy, if, as expected, the unemployment rate resumes its downward trend in 2006," is the view of Jon Lonski of Moody's Investor's Service.

[Leanan]

Yup. Retailers are already worrying that high prices for winter heating will ruin their Christmas. I am not confident that the economy will generate a lot of jobs.

BTW...has anyone seen their credit card minimum rates increase? It was supposed to be phased in after the bankruptcy bill deadline.

One of my credit cards warned me that rates would be increasing. But the card I use most often decreased my minimum payment. Instead of 2%, the minimum payment is now 1%. They cut it in half!

Are they trying to sucker me into carrying a balance, or what? Perhaps until after Christmas, at which point they'll quadruple the minimum payment to the 4% the feds have demanded?

[DantesPeak]

$this->bbcode_second_pass_quote('Leanan', 'Y')up. Retailers are already worrying that high prices for winter heating will ruin their Christmas. I am not confident that the economy will generate a lot of jobs.

BTW...has anyone seen their credit card minimum rates increase? It was supposed to be phased in after the bankruptcy bill deadline.

One of my credit cards warned me that rates would be increasing. But the card I use most often decreased my minimum payment. Instead of 2%, the minimum payment is now 1%. They cut it in half!

Are they trying to sucker me into carrying a balance, or what? Perhaps until after Christmas, at which point they'll quadruple the minimum payment to the 4% the feds have demanded?

[Leanan]

Yeah, I wouldn't have been surprised if the minimum payment hadn't changed. But they actually lowered it last month. Cut it in half. Seems rather odd, all things considered.