The Merry World of Spending

Spending this Summer

I'm David Brancatio.

There's news shoppers were shopping more energetically than expected in July

with retail sales jumping 1%. This is boosting stocks this morning but

making players in the bond market fret they might not get as many interest

rate cuts this year with the US economy still showing such strength.

On Thursdays we get an economic snapshot

from Diane Swang, chief economist at KPMG.

Good morning.

Good morning.

Well, a week ago, we were just talking about recession, maybe.

Look at the consumer in July.

I don't see any recession.

Now the consumer proved itself to be discerning,

but not defeated by high price levels,

and I think that's the most important message for the

Federal Reserve as well. We saw consumers come out and continue spending in the month of July

much more than people had expected and I think that's good news but it was also on the

heels of a good CPI number where it showed discounting actually picked up during

the month and so they're certainly showing their willingness to continue spending on fact that their

wages are going up faster than inflation.

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