Risks to the economic recovery are larger today than they were two months ago.
The data released last week was all from August, so it was old news and had little impact on financial markets. The widening of the trade deficit in August does create a drag on third quarter Real GDP. The drop in consumer credit was a surprise mainly centered in credit card balances. Use of credit to support the stronger final demand growth experienced in the last five months has lagged. Consumers are liquidating credit card balances and using excess liquidity from rising incomes and lower levels of spending overall to strengthen their balance sheets.
PROBANK AUSTIN ADVISOR - OCTOBER 12, 2020