Barry Ritholtz isn't buying it, but it's sort of hard to escape the impression that all those things we were worrying about a few months ago -- softening economic activity and creeping inflation -- have decided to take the summer off. From Reuters:
U.S. consumer spending advanced a robust 0.8 percent in June...
Income in June rose 0.5 percent, the Commerce Department said, a touch stronger than the 0.4 percent gain analysts on Wall Street had expected. The increase in spending, which was already reflected in a report on second-quarter economic growth released on Friday, was as expected.
An inflation index contained in the spending and income report showed prices steady, both overall and excluding volatile food and energy costs. Economists had expected the non-food and energy gauge to edge up 0.1 percent...
In a separate report, the Commerce Department said factory orders rose 1.0 percent in June as strong demand for computers and electronics outstripped transportation weakness...
Orders for durable goods, big-ticket items meant to last three years or more, were revised up to show a 2.0 percent gain in June. Computers and electronics orders jumped 10.8 percent and machinery gained 4.0 percent.
Excluding the volatile transportation category, which declined 0.8 percent in June, new orders rose a slightly higher 1.3 percent. Non-defense orders rose just 0.5 percent.
Non-defense capital goods orders excluding aircraft, a key gauge of business confidence, rose 3.9 percent in the largest advance since January.
Factory inventories were unchanged in June. The inventories-to-shipments ratio, a measure of how quickly stocks would run out at the current shipment pace, was also unchanged, at 1.23 months' worth.
The data did have its blemishes, handing Professor Hamilton -- who recounts one of his main concerns here -- some ammunition. From Market Watch:
The personal savings rate fell to 0%, the lowest since the post-9/11 consumer spending binge in October 2001 and the second-lowest since the Great Depression.
Calculated Risk notices this too, as does General Glut. And Mark Thoma as well (who actually focuses on the potential bright side of low saving rates).
Despite the psychological impact of the number zero, this problem has been with us for awhile now, as Jim Hamilton points out, and things do not look quite so dire if we keep our eye on total private saving, as I have emphasized. In light of everything else, maybe we can at least call the glass half-full.