Preliminary Real GDP for the 3rd Quarter came in at 2.5%, which is up from 1% for the 2nd Quarter of 1.3%. On the surface that looks very encouraging. Let's take a peek beneath the surface. What do we find? Well, personal income increased at a whopping 0.9% versus 4.6% for the 2nd Quarter. That's not good at all. Further, disposable income increased at 0.6% versus 3.9% for the 2nd Quarter. Still no good! Finally, consumer spending increased at 4.9% versus 3.7% for the 2nd Quarter. Yes, the consumer is back with the income. How is the consumer being able to spend? Oh, take on more debt. You would of thought the consumer would have learned something from 2008. I guess memories are just short lived.
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