need help understanding this article?

3 Responses to need help understanding this article?

1. jay says:

   May 25, 2009 at 9:23 pm

   Cathy

   Cliffs Notes:
   Consumer spending is how much the population spends. If spending is up, that means people (as a whole) are buying things. If spending is down that means people are saving money.
2. hustle4bread123 says:

   May 26, 2009 at 1:16 am

   Victoria

   just talk about the economy and the statisitics (numbers)
3. DSd says:

   May 27, 2009 at 9:42 am

   Clyde

   In a nutshell: Wall Street is trying to figure out if the recession is easing, and they’re looking for evidence (economic indicators) to prove it true or false.

   The article doesn’t draw any of its own conclusions. It basically says some people think the economy is improving and others think it’s not.

   The article does lay out a calendar of events that could give us more information about the strength or weakness of the economy.

   To address different points in the article itself -

   The stock markets (Dow Jones, S&P etc.) have gone up in the past few months, and people who work on Wall Street are trying to figure out if the markets are rebounding because the economy is picking-up or if this is a false rally and the markets will go down again.

   The article mentions negative factors that make people think it’s a false rally: unemployment ticked up unexpectedly and people are still missing payments on their debt.

   Wall Street is waiting to see if personal spending has gone up because that’s a sign that people feel their jobs and their paychecks are secure – the “wealth effect” mentioned in the article.

   The article mentions that Best Buy is reporting earnings on Tuesday. Consumer electronics are luxury items, and if Best Buy’s sales/revenue went up in the last few months then it indicates that people are spending money on the non-necessities in life…they’re feeling confident which means the recession could be easing.

   The article also mentions housing starts will be announced this week: are people committing to building new homes. The ripple effect from housing is tremendous. Someone builds a house and the construction workers make money, lumber yards make money, Home Depot makes money, plumbers make money, companies that manufacture nails make money, landscapers make money, electricians make money. Lots of people making money means the recession could be easing.

   (I’m not a financial advisor, and I’m not qualified to give you my take on the economy, but if you’re just looking to understand what this specific article means, I hope it helped!)