Good report from Commerce Department

Despite the current condition of housing market, the financial credit turmoil and a low consumer confidence survey last month, the Commerce Department had a good economic report released Friday. Consumer spending which drives two-thirds of the economy was up in August. It was the best showing in four months increasing 0.6 percent.

Not only was spending up, so was personal income increasing 0.3 percent. Then to top that, core inflation (after food and energy subtracted) was reported as only 1.8 percent for the year. That was the slowest year-over-year inflation increase since February of 2004. That should help to ease the long-term interest rates which have been increasing. The Fed’s comfort zone on inflation is between 1 to 2 percent. A big surprise was construction spending also increase 0.2 percent. What’s up with that?

Don’t look for the major news media to report on how well the economy is doing. It’s only when some poor soul has their home foreclosed upon, do you we see front page coverage.