Friday, August 31, 2007

Media Recoils at Good Economic News

Here's some economic data that should enrage the anti-U.S. mainstream media.

Inflation remains moderate in July
WASHINGTON (MarketWatch) -- Inflation remained cool while household incomes and spending strengthened in July, before market turmoil in August shook Wall Street and Fed policymakers, according to Commerce Department figures released Friday.

Inflation was milder than expected in July, with total inflation rising 0.1%, matching the 0.1% gain for core inflation excluding food and energy costs.

In the past year, the Federal Reserve's preferred measure of core inflation has risen 1.9%, just within the Fed's unofficial target zone of 1% to 2%.

Total consumer inflation (including all items) was 2.1% over the past year.
I would expect the Fed's to further ease the Fed Funds rate via open market operations to expand the money supply. Yes, there are real concerns out there about failed loans and the housing market, but it's not exactly "buddy can you spare a dime" time yet.

Incomes are still growing, although you don't want to read too much into monthly macroeconomic figures.
All told, the figures suggest that consumers were in generally good shape before the credit crunch in August sent financial markets reeling, forcing the Fed to conclude that risks of slower growth had risen substantially.
Expect a flurry of negative articles from the MSM predicting economic destruction to counter the actual real good news out there.

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