I'm Trying To Find The Downside Here -- October 30, 2015

I've noted this before, although I don't know if I have ever posted a note on this. This is way beyond my comfort zone; I know nothing about this -- but that doesn't mean I won't comment on it publicly at risk of looking like a fool (and maybe confirming same). Whatever. Maybe I will just post the "facts" as presented by those who know and then come back to this later. Not.

This is the headline for a story reported by the AP economics writer: US consumer spending records weakest gain in 8 months. The lede:

Consumer spending in September posted the smallest gain in eight months, a sign that shoppers grew cautious at the end of the third quarter.

The Commerce Department said Friday spending rose 0.1 percent, the weakest showing since spending fell in January. Income growth inched up 0.1 percent, which was the smallest amount in four months. Wages and salaries were flat following two months of big gains.

Hold that thought: spending was the weakest showing since January, 2015. Then this, from the linked article:

Much of the September slowdown reflected a fall in energy prices, which resulted in a 1.2 percent drop in spending on nondurable goods such as gasoline. Spending on durable goods, a category that includes autos, jumped 0.8 percent last month. Spending on services rose 0.4 percent.

So, consumers are "cautious"? 

• spending on durable goods, which includes automobiles jumped 0.8% in one month of cautiousness
• spending on services rose a respectable 0.4% in one month of cautiousness
• spending on gasoline dropped a whopping 1.2% (even though demand for gasoline is way up compared to a year ago)

And they did this by saving more:

The saving rate edged up slightly to 4.8 percent of after-tax income in September, compared to 4.7 percent in August.

The article only mentioned one thing that consumers spent less on: energy. Well, duh. Is that bad? Spending less on gasoline in September does not mean Americans are driving less. In fact, they are driving more, much more. Their cars are getting better mileage and Elon Musk is selling a gazillion EVs and yet the amount of gasoline sold in the last reporting period was on an upward trend, and significantly more than the previous reporting period.

Sounds to me like the American consumers are doing just fine. Thank you. Not only that, they enjoy seeing their utility rates increase because they feel good about installing solar energy and wind energy at $3 million / MW. And Starbucks, selling fancy coffee at $4.50 / cup has a record quarter. I assume coffee would be a non-durable, like gasoline.

***********************************

Notes to the Granddaughters

I'm finally getting around to reading a book I picked up last summer on our cross-country trip from Texas to California via the nuclear museum in Albuquerque, NM: Inventint Los Alamos: The Growth of an Atomic Community, Jon Hunner, c. 2003.

The font and footnotes suggested this was going to be a fairly dry, fairly technical book, but it turns out to be a much better book than first impressions suggest.

I finally know (or think I know, but probably don't "understand," and using the word "know" loosely) the difference between:

• the "atomic bomb" and the hydrogen bomb 
• Big Man and Little Man (both atomic bombs)

I've also learned

• why atomic bombs are easier to "make" than hydrogen bombs; and,
• that Sheldon Cooper on The Big Bang Theory is the reincarnation of Oppenheimer

I also learned a little bit more about Lise Meitner, perhaps my favorite "character" in this whole history of the atomic bomb. From page 18:

Meitner code-switched a term from biology and called this process fission, a scientific name for the splitting of organisms. In fact, nuclear and atomic, which denoted the center or nucleus of the atom, were also borrowed form biology. Thus, the very names of nuclear physics and atomic science are derived from biology.

The author dwells a lot on "code-switching" in this book.

A person who changes within a sentence from speaking his or her dominant language to another language "code-switches." People code-switch for several reasons: to show off sophistication, to express something their native language cannot precisely communicate. In border regions where people live at the juncture of several cultures, linguistic code-switching is common.

Enola Gay, OMD