Today, Americans are spending so much because we are so rich. The rise in household wealth has convinced us that there is no reason to save. Borrowing has been strong, as households refuse to wait for the luxuries they feel confident they can afford. We again expect the economy to slow, because consumers cannot continue to outspend their income. Consumer spending must slow to the growth rate of income.
Public utilities are a special case.
Deregulation has confused the industry, as it divides into transmission, generation, and distribution companies from the prior vertically integrated structure. Capacity is getting tight, but capital for investment is hard to find. We expect the capital to appear as the industry emerges into the deregulated world. Investment is strong, but slowing. Consumers are tapped out, and exports continue to slide because of the Asian recessions.