The 1.9 percent rise (annualized) in the second quarter masks a very weak economy. Without rebate checks, that number would have been lower. Growth in the third quarter will not be above 1 percent.

Consumer spending is so slow that some clothing and restaurant chains are going out of business. The back-to-school sales this month reflect the fact that without rebate checks, consumer spending is very weak (because consumer expectations are as low as ever recorded in our surveys).

There is some good news. Crude oil prices have backed off a little. The same is true for prices of wheat, corn, and rice. Indeed, commodity prices in general were lower in July. Giving a slowing global economy, commodity prices might be expected to continue to ease. But financial markets remain jittery and credit is still not flowing freely. That is the biggest problem this summer.

"The government may have to give a taxpayer guarantee to billions of mortgage market bonds." Yes, that is a quote from the Treasury, but it is from the British Treasury. And it shows the international dimension to the global credit crunch and that housing isn't just a domestic problem. And the problems in the credit and mortgage markets are taking place against a background of weakening growth across the globe.

All the news isn't bad. Prices for crude oil have backed off and this time it could be more than just a temporary zig-zag. Demand is easing and that is finally translating into lower crude prices. It remains to be seen how much of this will show up at the gas station. Still, that is better news out of the energy sector than has been seen throughout much of the past two years.