There's some backing and filling by those of us who've thought the fourth quarter was going to be negative for economic growth. (I'm not in that camp, btw, but I have thought it would come in around 1% and continue to stand by that.) James Hamilton looks at the consumer spending numbers and concludes that there is almost no chance of a negative fourth quarter. Retail sales, particularly online, seem to be called either "decent" or better. I for one do not ever place much faith in consumer confidence polls as being indicative of spending, so fretting over their fall seems a waste of time.

It nevertheless beggars the imagination how we are managing to have positive consumer spending when real disposable personal income has been down in both October and November. Maybe it's credit cards, as Michael Mandel notes more than 4% of credit card balances are at least 30 days delinquent. The question I think will turn on how aggressive price-cutting cited in many places this season ends up helping or hurting sales and the bottom line.

And there's still this sub-prime thing out there... Here's a couple facts from the local market that someone provided to me last week. Volume of sales in local real estate in the St. Cloud area is down 16.6% through November. Inventory of listings to sales is now over 24 months compared to 20 in November 2006.

If consumers are leading us through this soft patch, my question is ... with what?

Labels: economics