Slowing Consumer Spending

In another sign of the slowdown in consumer spending, orders for durable goods declined by almost 5% in August, the biggest decline in several months.

To me this is just confirms what I've been thinking and reporting on this blog recently.

In combination with that report on problematic credit card debt from two weeks ago, we seem almost certain to be coming to the end of "consumer spending as the basis for the American economy".

In the mean time, the vast majority of adjustable rate mortgages have yet to be reset, and foreclosures are accelerating. The Fed may have reassured the markets that they are attending to the situation, but continued "attention to the situation" can only result in reduced interest rates, and dollar exchange rates.

It's an interesting decision. Which is more important? The American consumer led economy, or the value of the dollar?