Bonds are improving again this morning on a report that personal income for the month of August fell 0.1%, and was revised down to 0.1% growth in July. This was the first outright decline in income since October 2009. Consumer spending, however, rose 0.2%, with the increase in spending the result of consumers dipping into savings, which is not a sustainable factor for economic growth.
Continuing with the consumer theme, the Thomson Reuters/University of Michigan final index of consumer sentiment climbed to 59.4 this month from 55.7 in August.
On the business side of the economy, the Institute for Supply Management-Chicago reported its business barometer rose to 60.4 this month from 56.5 in August. A level of 50 is the dividing line between expansion and contraction, and we will see the national version of this data next week.
The positive news on consumer confidence and manufacturing has not been enough to offset the negative effect of the personal income report and the continuing saga coming from Europe. The yield on the 10 year note has fallen to 1.95% and mortgage prices have improved approximately .25%.
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