Really? Light motor vehicle sales down for six consecutive months (see Chart 1) is cause for consumer spending optimism? Bed Bath & Beyond, Best Buy, Circuit City, Sears Holdings, Home Depot and West Marine recently issuing profit warnings are a cause for consumer spending optimism? Downward trending year-over-year changes in nominal same-store national chain retail sales (see Chart 2) are a cause for consumer spending optimism? Downward trending consumer sentiment (see Chart 3) is a cause for consumer spending optimism? Near record household debt service burdens (see Chart 4) with billions of dollars of adjustable rate mortgages due to rest higher in the coming 12 months are a cause for consumer spending optimism? Falling house prices and slowing active mortgage equity withdrawal (see Chart 5) are a cause for consumer optimism? Near record low household liquidity (see Chart 6) at a time of near record household leverage (see Chart 7) is a cause for consumer spending optimism? If these are causes for optimism, President Plosser, I would hate to see pessimism!

Chart 1

Chart 2

Chart 3

Chart 4

Chart 5

Chart 6

Chart 7