Today's passage of EESA 2008 is expected to help shore up troubled credit markets in the weeks and months ahead. In addition, the legislation should help to bolster investor confidence and business confidence to some extent once it is up and running; however, data released this week only served to highlight what was already a weakening U.S. economy and one that is only likely to get weaker.
Real consumer spending was flat in August, but overall spending during the third quarter is on track to drop by its largest pace since 1990. In yet another sign of the beleaguered consumer, September marked the lowest monthly total of auto sales since December 1990. All automakers were tagged with slumping demand thanks (or no thanks) to the credit crisis, high gas prices and a struggling labor market. Speaking of the labor market, payroll employment contracted for the ninth consecutive month and was the largest (-159,000), as well as broad-based, in more than five years. Finally, the ISM index revealed that manufacturers experienced their worst month for business activity since October 2001.