Sung Sohn Spending Quotations

The point is that mounting layoffs and weak consumer confidence will keep consumer spending fairly weak.

What's lacking is confidence, so businesses aren't spending the money they have, ... That's why I don't necessarily think it takes a huge fiscal stimulus package to get the economy moving.

Business spending is the Achilles heel of the economy, ... The economic baton needs to pass from consumers to businesses.

The third cylinder of economic growth is beginning to fire, ... The other two cylinders are inventory swings and consumer spending. Outside of telecommunications and airplanes, business capital spending has begun to improve already, beginning in the first quarter.

It's pretty clear that all the pieces for capital spending are in place, including rising sales, lower inventories and increases in shipments and orders, ... So, despite what CEOs say in public, there's no question that capital spending -- outside of aircraft and telecommunications -- has bottomed and is on the way up.

Consumers are not on a spending spree, but they continue to spend,

Construction spending is always a lagging economic indicator, especially in commercial construction, because of the time it takes to plan, execute and build. I expect housing to be a stabilizer, but commercial construction to be a drag on economic growth for a while to come.

That's one of the reasons why consumers are not going on a spending spree, though they're keeping the economic ship afloat. When higher unemployment numbers come out, that will probably rattle consumer confidence a bit.

The bedrock of consumer spending and confidence is employment. The expectations of more jobs has boosted consumer confidence.

But if things start to go wrong -- if business spending doesn't pick up, or state and local governments lay off more people than anticipated, or auto sales fall off, or interest rates go much higher -- then a combination of these factors would really affect the economy going forward.

If deficit spending goes well beyond 2005, 2006, 2007 or 2008, it will lead to crowding out,

The loss of confidence in the financial reporting of Corporate America could hurt both consumer and business spending, ... The reduced availability and higher cost of credit, as well as the desire to strengthen the balance sheet, could cause firms to postpone capital spending plans and accelerate layoffs.