I am shocked that consumer spending crept higher in the month of August. This could be a sign that we will not enter into a recession. Former Fed Chairman Alan Greenspan commented yesterday that the likelihood of a recession is less than 50-50.
The key rate cut by the Fed certainly helps ease some credit worries, and it seems consumers are responding favorably for the most part; however, overall economic growth is expected to lag in the coming quarters.
The better than expected consumer spending data will hopefully lift the already increasing financial markets. However, I think we are headed for a correction in the short run.
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