By Martin Crutsinger – Huffington Post
WASHINGTON — Consumer spending plunged in September by the largest amount in nine months, reflecting the end of the government’s Cash for Clunkers auto sales program. Incomes, the fuel for future spending, were flat.
While the government reported that the overall economy grew in the July-September period, signaling the end of the worst recession in seven decades, the weakness in spending and incomes as the quarter ended underscores the fragility of the recovery.
The Small Business Administration has raised the limits for 504 and 7a programs, along with relaxing some requirements. Since the SBA doesn’t actually make the loans (banks do) and doesn’t have to service them or carry them on their books (banks do), it remains to be seen if this will launch a renaissance in small business lending or is just another feel good photo op.
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“You need a brand makeover when the marketplace tells you so directly: Sales are slowing and market share is shrinking,” Adamson says. “But it’s often too late to change things when they are really off. You have to catch it just at the tipping point when things are going great, but the increases are diminishing and momentum is giving out.”
