In general, the economy is proving to be resilient to energy and gas price pressure. It's on a growth path. Even though oil prices are higher, the fundamentals of the economy are strong. Therefore, we see consumers' savings rate falling and spending up.
The net effect on the economy is always positive. We have more consumers of energy than producers and the result is that the sector that benefits from low inflation and low interest rates comes out ahead.
Overall, they were a bit concerned about inflation and see strong growth, which supports the notion that they will continue to tighten policy. But after Katrina, all bets on how much they might tighten are off the table,
Consumers are always concerned about the economy but the key is whether they are predisposed to increasing caution when it comes to spending. I think today's report demonstrates that the hurricanes had an ambiguous affect on spending.
What we are seeing is that these numbers are coming in line with other confidence figures, which shot ahead in May and June with oil prices falling, and now with oil prices soaring, we are seeing the effect from higher prices at the pump.