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Awaiting the Prudence Payback - Jul 29, 2010
By Peter G. Hall, Vice-President and Chief Economist, Export Development Canada
Lambasting big-economy consumers for their excesses has become a popular recession-time sport. Chastened by the exposure of their self-engineered plight, many consumers have hunkered down, quietly working down excesses and deleveraging. Their activities are obvious in consumer spending data; this large chunk of the world economy has been a soft spot. Is the new prudence paying off?
One look at indebtedness data, and it doesn’t seem to be doing anything. Consumer debt as a share of disposable income is still sky-high, an ominous signal that a full consumer recovery is no slam dunk. But these data always look worst just after a recession. As incomes recover, debt ratios can improve markedly. A better gauge of current consumer
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Daily Update (Source: RBC Financial Group)
U.S. Beige Book imply a slight downgrade to the economic outlook
July 28, 2010
Today’s beige book report, compiled in preparation for the August 10 FOMC meeting, provided a much more qualified characterization of the recovery among the 12 Fed districts compared to the report prepared in advance of the June 22-23 FOMC. Although the report opened by stating that economic activity continued to grow, the qualifier “on balance” quickly followed. This qualifier reflected that while eig
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