Today's economic numbers

I haven't kept up with this as much as I should have, but we've seen three sets of numbers in the past two days that raise serious doubts about the validity of Alan Greenspan's "soft patch" theory/wish.

On Monday, we learned that, while consumer spending rebounded in July, consumer income growth was extremely weak, up just 0.1 percent, far short of Wall Street expectations and the weakest growth in two years.

The good news in that report was that inflation was tame and June's spending swoon was revised to something a little less disastrous.

The bad news is obvious: consumer spending makes up two-thirds of the economy, and if people aren't making money, they aren't going to spend money, unless they take on more debt, and they've already taken on quite a bit of that.

This morning, we got the Chicago PMI, the read of business activity in the Chicago region. I'm not exactly sure why this gauge is so much more closely watched than the indexes from other regions, but it is, and it showed a sharp slowdown in August.

The Chicago gauge's employment component actually rose a bit -- good news -- but inventories rose, too -- bad news, if shops are getting stuck with a bunch of stuff nobody wants to buy. Production prices rose, too.

Also today, we got the Conference Board's reading on consumer confidence in August. It slumped badly. It's still at a relatively high level, but job prospects have apparently not improved over July or June, when non-farm payrolls posted paltry gains.

I talked to Conference Board economist Delos Smith, who said his boss had gotten about "50 calls" from the White House about the numbers.

And little wonder: the Conference Board's number is the most highly respected in the universe of consumer confidence numbers.

It's also heavily dependent on how consumers feel about job growth and raises the possibility that, when Elaine Chao and Co. roll out their labor market numbers on Friday, they'll show that August was a crappy month to try to find a non-farm job, just as June and July were.

As the always entertaining Bob Brusca said today, ranting in response to those who claim that the comatose weekly jobless claims numbers are a sign of a new job boom:

The trend in job growth is clear: from 353K down to 324K down to 208K down to 78K down to 32K. Any questions?

Is there any REASON for people to think job growth will reverse this pattern? That is, is there a reason other than that such a shift is what is needed to confirm extant economic forecasts? Are there countervailing strong economic reports that say claims data are correct and job trends are wrong?

Friday's report comes the day after the Boy King accepts his party's nomination for a second term. If it's bad, it could crap all over his post-convention "bounce."

Stay tuned.