Some economic indicators mean more than others. Consumer spending, for example, accounts for roughly 70 percent of U.S. GDP. So a "surprising" 1.3 percent "surge" in consumer spending in August is getting a lot of attention in this morning's financial press. The month-to-month percentage jump was the biggest since May 2008.
But August was Cash for Clunkers month.
From the Bureau of Economic Analysis:
Purchases of durable goods increased 5.8 percent, compared with an increase of 1.8 percent. Reflecting the impact of the federal CARS program (popularly called "cash for clunkers"), purchases of motor vehicles and parts accounted for most of the August increase in purchases of durable goods and more than accounted for the July increase.
As part of a slew of economic data releases today, we will find out what the post-Cash for Clunkers U.S. auto market looks like, when automakers report their September sales. The news could be grim -- some prognosticators have been suggesting that September will be the worst month for car sales since the recession started. If that pans out, the verdict on Cash for Clunkers will be that it "stole" sales from the future, and the consensus on August's consumer spending bump up will be that it was only a temporary boost.