[David Haffenreffer, Cnn Anchor:] Well, Christine Romans joins me now on this Friday morning with the numbers expected for today's economic data, personal income and spending, as well as factory orders. Good morning.
[Christine Romans, Cnn Correspondent:] Hi there. Well, factory orders is an old number, yesterday's news, very rarely riles the market. But we're going to be taking a close look at personal income and spending. There's going to be a savings-rate reading in there, too. So we're going to get a picture of the American consumer, the average American. What's he or she putting in the piggy bank? And what is he or she spending at the mall? And I bet you can guess.
[Haffenreffer:] Nothing in the piggy bank and everything at the mall.
[Romans:] Exactly. So for personal income, at least, this is what we're looking for: Wall Street is forecasting that February personal income rose 0.3 percent. That is, you know, much shy of the January gain of 0.7 percent. So they're looking for personal income to slow down a bit in February. But when you look at the spending picture, what is the American consumer spending? What is the average American spending on consumption? You can see that they're looking for that to jump to a 0.8 percent increase in the month, led by autos, compared with January gain of 0.5 percent. And the savings rate? Well, economists are saying it's probably down at another all-time low. If you look at what the American is saving, you can see that over the past decade or so the piggy bank's empty. But on the flip side of that, folks are saying that people are putting more and more money into the stock market this is where we talk about the wealth effect. We talk about this constantly that their putting money into the stock market. That is their intermediate and long-term saving vehicle at the moment, not necessarily the bank accounts. So the savings rate can be a little bit deceiving, but still it concerns some people who say that, you know, the average American has credit card debt, has incomes that are rising, but many months they're spending more than they are earning, and they're keeping the savings rate pretty low, so...
[Haffenreffer:] Isn't that the American dream now? If you break it apart, and you see that incomes are coming down, that should please the Federal Reserve, no?
[Romans:] It should, it should. But remember, in January income rose 0.7 percent, so this could be a one-month anomaly. You have to see sort of you'll have to see a smoothing out. They'd like to see that sort of gain a little bit. You know, but then at the same time, there are other people, politicians, for example, who like to see that you know, like to see those wages step up with productivity. If companies are making more money because productivity is increasing, they like to see some of that given back to the workers as well.
[Haffenreffer:] What's the most important aspect of this report that the Street will be keeping an eye on?
[Romans:] Take a look at the consumption figures, because when you look on a quarterly basis, if we come in with 0.8 percent, on a quarterly basis that means that real consumption is stronger in the first quarter of this year shaping up to be stronger in the first quarter of this year than it was in the fourth quarter of "99. And that's when the Fed was concerned about the pace of the U.S. economy. There's a couple of other reports too, David. University of Michigan Sentiment and the Chicago Purchasing Managers" index. That Chicago number could be interesting about what it might foretell for the national report next week. Remember, we get the National Association of Purchasing Management report and the jobs report next week. Those are seen as very key as the most important most recent pictures of what's going on in the U.S. economy.
[Haffenreffer:] We are seeing a nice showing here for the futures. Any indication anybody talking on the floor of the exchange about what to expect on the final day of the quarter?
[Romans:] They keep talking about this window dressing, and I know I keep talking about window dressing as well, but they're looking for a bit of volatility today because they think that there will be money pouring into these blue chips that have performed pretty well this week, even amid a tech rout. So they're looking for more gains perhaps into the end of the week but you never know.
[Haffenreffer:] OK, Christine. We'll see question mark. Search CNN.com CNNSI.com CNNmoney.com The Web