With that in mind, what would have been a nerve-wrecking week of five days of anxiety might boil down to only three - with the election looming a week from tomorrow. These massive storms, and other disasters, remind us of what's most important yet having the funds to weather these storms also highlights why it's so important to have the most prosperous nation possible. Right now, we pray there is no loss of life, and then we'll discuss the role of government. I must say I'm extremely impressed with how governors of New York and New Jersey sprang into action yesterday.
For me, this kind of stuff underscores why local governments should be allowed to handle commerce, education, and emergencies. Sure, the federal government should return money to hard hit regions, but when it's all said and done, one centralized command center that's out of touch with local nuances and needs just makes matters worse. The way this will play out is individual families hunkered down after loading up on food, water, and batteries. They will go out to fix doors and windows if needed, and they will huddle and make it through this. The basic building blocks of America's greatness will be on display this week.
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Personal incomes came in at a 0.4% increase for September which was in line with the Street's expectation, and that was actually the most it's increased since March. The thing is spending continues to outpace incomes, for a third month in a row. Spending increased by a hefty 0.8%, the most since February and above the 0.6% consensus. We've noted before that it's almost like Americans are spending for the moment and consequentially have dialed down their personal savings rate all the way from 3.7% to 3.3% month to month. That's the lowest it's been since last November, which also happened to be the lowest point amid the European crisis.
On that note, one could look back at August's consumer credit data which increased by 8% and wonder if the two are related. Naturally many Americans will be dipping into savings and levering up to stay on top of their basic needs. However, judging by some relative strength in retail in the third quarter, it almost seems many people are also spending away (think iPhone5) even if they can't necessarily afford it.