in August fell 2.9% from a year ago. Normally, that would be a bad sign, but not in a recession. It was the strongest showing since April and better than the 3.8% decline analysts expected. Discount stores fared better across the board as consumers are still looking for value. With Labor Day coming so late this year, some back-to-school sales may have slipped into September. And the next big test, of course, will be the holiday shopping season right around the corner.
Factory activityrose in August, and the Institute of Supply Management’s index rose above 50 (to 52.9), signaling an expansion for the first time since January 2008.Here’s an interesting takeon why that isn’t necessarily good news for stocks.
Federal Reserveofficials apparently believe the recession is ending, according to the minutes from the last Fed meeting three weeks ago. The discussion is already starting to turn to how best to end some of the stimulus projects before inflation becomes a problem. (I talked about this in an exclusive interview with Charles Plosser , President of the Federal Reserve Bank in Philadelphia.)
Those of you who have signed up for my e-letter , please note that I’ll send out next week’s issue on Tuesday, after the Labor Day holiday. I’ll be in touch with an interesting look at Steve Jobs, insights from the Ambrosetti conference in Italy, and of course, the key items to watch next week on the street.
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