Monday August 17, 2009

On Friday the Reuters/University of Michigan reported that the preliminary index of consumer sentiment fell to 63.2 for August, the lowest level since March 2009.  While there has been a lot of discussion in the economic press lately about whether the recession is over, any hope of a sustained recovery requires the U.S. consumer to begin spending again.  Since the consumer has typically accounted for more than two-thirds of the U.S. economy their continued retrenchment casts doubt on any sustained recovery.

As many of you know, GEM retains Strategic Asset Alliance as our independent investment consultant.  Alton Cogurt, the President of SAAI writes a weekly blog called the Northwest Quadrant that I read.  He discusses consumer deleveraging and the impact on GDP.  While inventory replenishment may give a short-term boost to GDP, unless consumer retail spending picks up dramatically the sustainability of GDP growth remains in question.

Read all of what Alton has to say at: http://www.saai.com/index.php/category/blog/

 

 

» Posted by John M. Foehl, Jr. at 9:45 AM