Quote of the day – why we’re not yet in a recovery edition
Yeah, I know, there are technical definitions of what constitutes a recession and a recovery. But if you’re unemployed, underemployed or given up on finding a job, you find none of those technical definitions unimpressive.
Anyway, this particular quote, in a nutshell, tells you why the “recovery” isn’t much to write home about:
Data released by the Bureau of Economic Analysis at the Commerce Department this morning shows that Americans earned a bit more, spent a bit less and saved more in June — all in line with economists’ expectations. Consumer spending drives about 60 percent of the economy, therefore, economists do not expect the recovery to take strong hold until American families feel secure enough and are earning enough to spend again. Unemployment, of course, remains a major drag on the economy.
So, while savings is good in general, it’s not good in a macro sense when you’re in a recession. And, as the quote notes (and I frankly think the number is low) when 60% of the economy is driven by consumption, increased savings and less spending is not a good sign. It’s all about confidence, and consumers simply aren’t feeling it.
That may be because of the last sentence which has my vote for the understatement of the year.
The good news, however, is there was nothing, apparently, “unexpected” about these numbers.