Two new pieces of info about the U.S. economy out today add to the pile of data indicating a frustratingly slow economic recovery.
Americans spent more in August even though their income barely grew, the Commerce Department said. The spending increase was driven in part by higher gas prices. The report also showed that weak job and wage growth are keeping American incomes low.
Another much-watched report on U.S. economic activity showed the first slide in three years. Slowing growth in China and the persistent problems in Europe are likely contributors to this drop.
The upcoming election will settle some things, according to the report. “Uncertainty about taxes, regulations, and public policy going into 2013 is causing spending decisions to be deferred or constrained until the picture is clearer,” it said.
While this is obviously not good news, it’s important to keep in mind that this is just one month’s worth of data. It is not clear whether this is a blip or a larger trend.
There was also news on Europe’s debt crisis:
Spanish banks are short about $69.2 billion, according to stress test results, about in line with expectations. This is one step on the way to Spain tapping into EU funds to help its economy and banking sector.
U.S. markets were trading about a third of a percent lower this afternoon.