Friday, November 30, 2007

No Recession, Just Slow Growth, So Far

Today, the Commerce Department estimates that personal incomes were up about 2.4%, at an annual rate. Also, spending did not trail off more than income (of course, these numbers don't tell the whole tale, but they are ... indicators).

That's about in-line with the forecast put up here for slow 2008 GDP growth (see below) and its personal consumption component. All the same, the real consumption and income figures were slower than my expectations - enough to be worrisome.

Inflation ticked up a bit.

Sounds like a good recipe for inflation-protected bonds, right, which have been going gangbusters for a couple of months now. They may have just a bit more to go.

It's going to be a rough go in the first quarter. Wall Street is going to have to get used to a slow growth economy.

But for now, Santa has a nice hat. Leading indicators are soft, but not flashing deep or harsh recession. In fact, activity levels seem high, outside residential construction, so folks may not even "feel" a slowdown, much. It's a pinch, not a slug, so far.

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