Consumers (Allegedly) Saved the Economy in July by Buying Cars, Maybe

We might or might not be in a recession now, in late August; the Boys in the Lab, however, want to convince us that we weren’t in a recession in July. Because cars!

According to Reuters, consumer spending is up, up, up! (“increased 0.8 percent”) And what are we all buying? CARS! (But probably not Saabs.) Or, at any rate, it was up, up, up back in July. Which means we’re probably not in a recession in August because of math and crying.

The excitement stems from the fact that consumer spending allegedly climbed at its fastest rate since March of this year. According to the Reuters story, “When adjusted for inflation, spending rose 0.5 percent last month, the largest gain since a matching increase in December 2009, after being flat in June.”

Reuters also pulled a quote from this guy, Jeffrey Greenberg, an economist at Nomura Securities in New York: “If anybody was concerned about this recession risk people were taking about, this personal spending number seems to be another point against that recession argument. It seems at least through July, the economy was not too poor.”

Of course, the world collapsed in August when the U.S.’s credit rating was downgraded and the guy who sits across from me in the office began muttering about stocks and financial ruin and that eTrade baby. Things still look pretty volatile. And a recent quick-show-of-hands poll in the office shows that no one bought a new car in recently — so, there?

Answers to the are-we-or-aren’t-we-in-a-recession come with some political baggage, of course. And I’m not comforted at all by Greenberg’s use of the verb seemed in his statement “it seems…the economy was not too poor.” Unemployment is still pretty staggering, for one thing — and the economy needs people making money in order to buy things (like cars). It also needs people saving money; but, as the Reuters article pointed out, “Savings fell to an annual rate of $582.8 billion from $638.6 billion in June.”

So, it’s time for a quick poll: