MARY REICHARD, HOST: Coming next on The World and Everything in It, the Monday Moneybeat.
NICK EICHER, HOST: Today’s the last day of Quarter Three and the outlook for Gross Domestic Product growth is not good. We won’t have an official estimate for another four weeks. That’s about how long it takes for government economists to crunch the numbers from July, August, and September.
But the latest report from the Commerce Department on consumer spending for August suggests they won’t be crunching very big numbers. American consumers spent just one-tenth of a percentage point more than they did the previous month. That’s the smallest gain in six months. Personal income is up four-tenths, but Americans are putting those gains in the bank.
Consumer spending accounts for about two-thirds of economic activity, so as goes spending, so goes economic growth these days. Business investment has been relatively weak, and together with weak consumer spending, that’s likely to produce a weak GDP number. Private economists slashed their forecasts for third quarter GDP based on the news.
Since the beginning of the year, when economic growth came in surprisingly strong, it has progressively weakened as the year has gone on.
REICHARD: Wall Street lost ground for the second consecutive week. All the major stock indexes finished down: The Standard & Poor’s 500 lost a full percentage point in value. The Dow Jones Industrial Average finished the week down four-tenths. The Nasdaq fell 2.2 percent and the Russell 2000 dropped 2.5.
These are relative values and what’s characterized the stock market this year is volatility: the smallest signal that maybe the trade war is nearing an end tends to drive the market up—or bad news on the trade front drives it down. Even still, despite the two losing weeks, the S&P 500 remains just 2.1 percent below its all-time high set back in July.
EICHER: Republicans and Democrats put aside their differences over impeaching the president and rallied around virtually the only thing Congress rallies around anymore—and that’s keeping government money flowing. President Trump signed the stopgap spending bill that staves off a government shutdown through November 21st. That bill passed the Senate with 82 votes, and it buys additional time for lawmakers to find a compromise over a bundle of spending bills worth about $1.4 trillion. Everyone’s essentially agreed on the broad funding level. The argument is over wall construction on the southern U.S. border and taxpayer funding for abortion.
And that is today’s Monday Moneybeat.