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Thoughts On The Economy

Nobody disputes that the economy is slowing down. We may very well be in a recession. Part of the reason is certainly the credit crunch, and another reason is that after many quarters of economic growth, we are due for a slowdown.

On the other hand, I read an article today that suggests that things are not as bad as everybody is saying. Durable goods orders are up.
It's also true that consumer confidence is down. So it looks like a mixed bag.

But it's instructive to look at what the two indicators are. Durable goods orders are measures of what people are actually doing, and consumer confidence is a measure of what people are thinking and feeling. The favorable indicator measured something real, and the unfavorable indicator was one of perception. This is something to take comfort in.