So my baseline has been that the US will see continued real growth throughout the second half of 2011 and accelerating into 2012.

Nonetheless, I think we have to be alert for signs of weakness. Low Q2 GDP and the notion of a “stall rate” did not impress me much. However, the poor showing out of the regional manufacturing survey’s did. It is highly likely that manufacturing is now in decline in the United States. This is disconcerting.

All of that having been said, however, I am not yet calling for a double-dip, merely raising awareness about the data we should be looking at.

Dean Baker, is also not calling for a double dip but goes way too far, in my opinion.

The Commerce Department just released datashowing that real consumption spending rose by 0.5 percent in July. This makes it highly unlikely that growth will turn negative in the current quarter. Consumption is 70 percent of GDP and this figure implies a 6.0 percent annual growth rate.

Of course consumption is not really growing that fast, more likely it is increasing at near a 2.0 percent annual rate, but maybe this number will shut up the arithmetic challenged economists who keep talking about a double-dip recession.

So just as we knew or should have known that auto supply disruptions were going to drive down Q2, we should realize that resolution of those issues would boost Q3. Had that failed to happen, alarm bells would be going off like crazy.

So, I don’t the PCE data tells us anything besides “situation still uncertain.”