If you needed any empirical evidence to prove the doomsday proclamations by the financial pundits are false claims, just look at the July consumer spending results. July spending more than doubled expectations.
July results were +0.7 percent, against the economic forecast of +.03 percent. Consumer spending makes up over two-thirds of the U.S. GDP and overall economy. Doesn’t exactly sound like Main Street is on the precipice of a recession. Oh my.
Average wage growth remains +3.5% year-over-year. The growth of overall income for American workers exceeds +5.4 percent year-over-year. Unemployment is a low 3.6% and U.S. consumer inflation remains low at 1.4 percent. Meaning: the middle-class has more disposable income to save or SPEND; and that’s what is happening….
- Reminder #1: Consumer spending is two-thirds of the U.S. economy.
- Reminder #2: We consume more than 80 percent of our own production (products created in USA). We do not rely on exports.
- Reminder #3: Because of #1 and #2, the “Main Street” U.S. economy is self sustaining -much stronger- and more protected from the negative impacts on the global economy.
- Reminder #4: Who/What is at risk from global contraction? The Wall Street economy (compromised primarily of multinationals). What is not at risk, the Main St economy.
- Reminder #5: Because of #3 and #4, Wall Street can drop while Main Street thrives.
This is the fundamental disconnect. These Main Street results, this dynamic, is the space between two economic engines that CTH has been describing for three years. The investment class on Wall Street can go through pain, while the middle-class on Main Street thrive. We are in the space between.
Wall Street Journal: WASHINGTON—American shoppers gave the U.S. economy a solid boost in July, a counter to weakness in the manufacturing sector and Wall Street jitters about faltering growth.
Retail sales, a measure of purchases at stores, restaurants and online, climbed a seasonally adjusted 0.7% in July from a month earlier, the Commerce Department said Thursday.
The robust report—the strongest reading since March and a sign that American consumers remain a source of fuel for the economy—is a positive signal for the U.S. amid warning signs of a global economic slowdown. (link)
Oh noes, the Deplorables are shopping: