Recession???? Why do we give the doomsayers so much attention when reality says otherwise??

In Plague-Filled August, American Consumers Shopped Like Champs

By Daniel Gross, economics editor at Yahoo! Finance

(Abridged version)
August was a plague month for the American economy. It started with the U.S. debt-ceiling crisis, continued with nausea-inducing market volatility, and closed with a small earthquake and a massive hurricane — all with a steady drumbeat of European instability in the background.

But when the going got tough, the tough went shopping. Or at least that's what the data that has poured in on Thursday indicates.
First, news from the nation's single largest retail sector: automobile. Sales were generally up sharply from a year ago, and up from July. GM sold 218,479 cars in August, up 18 percent from August 2010 (and up 1.7 percent from July 2011). (Interesting note: the Cruze alone accounts for about 10 percent of GM's sales). Ford's sales in August, at 175,220, were up 11 percent from August 2010 (though down a bit from July 2011). Rounding out what used to be known as the Big Three, Chrysler reported August sales of 130,119 vehicles, up 31 percent from the year-before, but also up 16 percent, from July sales. Want more? Nissan North America, up 19.2 percent from August 2010. Volkswagen, up 10 percent from last August. Toyota and Honda, which report later in the day on Thursday, are likely to report sharp declines, due to lingering inventory problems related to the earthquake/tsunami in those companies' home country.

Next, look at the news on non-automotive retailing. As Reuters reported: "Many top U.S. retailers reported better-than-expected August sales, withstanding Hurricane Irene and sagging consumer confidence." Among the trains tracked by Retail Metrics, same-store sales rose 5.5 percent in August from last year, as the Financial Times reported. The International Council of Shopping Centers said same-store sales in the chains it tracks rose 4.6 percent in August 2011 from August 2010. Check out some of the individual chains: Macy's, same-store sales up 5 percent from August 2010; Target, same-store sales up 5.4 percent from the year before; Limited Brands, same-store sales up 11 percent; Saks, up 6.1 percent. At Costco, U.S. comparable sales were up 9 percent from the year before; excluding the higher price of gasoline from a year ago, same-store sales were up 6 percent.

Despite the rising chorus of doomsayers and double-dippers, the third quarter is looking like it will be stronger than the second quarter. Macroeconomic Advisers, which updates its projections in real time, pegs growth in the current quarter at about 2 percent. While that's nothing to write home about, it's twice the rate of second quarter growth. What's more, payroll jobs, which help drive spending, continue to grow at the (anemic) pace of about 25,000 per week. The savings rate remains high, and many signs of stress — credit card delinquencies — continue to trend down. On aggregate, Americans are in a better position today than they were a year ago to do what they like to do: buy stuff.

The overwhelming majority of people in the U.S. aren't watching CNBC, reading Politico.com, harrumphing about the latest outrage from the European Central Bank, or digging out from the ravages of Hurricane Irene. As New Yorkers and beltway types were in full freak-out mode over the S&P downgrade, the locals were generally going about their business — going to work in their Priuses, eating natural foods, and shopping.