THE MARKET BRIEFLY begged to differ, but the economy found no cure for the summertime blues, our pundits have concluded, pondering recession, oil prices and slowing growth. And autumn doesn't look much better.

Citigroup's chief economist Steven Wieting didn't savor the economic data released this morning. The exhaustion of tax rebates contributed to a 0.7% nominal drop in U.S. personal income and a 1.1% drop in disposable income in July, suggesting the economy won't get a further lift from financially stressed consumers.

Nor are companies faring much better. Merrill Lynch U.S. sector strategist Brian Belski noted on Aug. 21 that the 95% of U.S. companies that had reported second-quarter earnings as of then delivered a 22.3% drop in earnings from the year-ago quarter, the worst decline since the last three months of 2007.

"We continue to believe that the contagion effect of subprime- and credit-related issues within financials has largely been underestimated," Belski wrote. "Therefore, we believe there remains a high likelihood of additional weakness to earnings estimates heading into the months ahead until analysts and companies alike become even more conservative with their assumptions."

Others also see hard times ahead. "The stock market is telling us we have a greater likelihood of recession," wrote Liz Ann Sonders, chief strategist at Charles Schwab. In her August market summary, she argued that the widely cited International Monetary Fund estimate of $945 billion in loan losses stemming from the subprime mortgage collapse and subsequent credit crunch was probably too low. "It's clearly taking its toll on the economy."

Ed Hyman at the data-heavy firm ISI Research cited world-wide business climate surveys from Germany to Singapore in his Aug. 26 report, and said global growth is certainly slowing. The next day, he said the United States was in even worse shape. "Odds are increasing that the economy is slipping into recession," Hyman wrote. "Oil is key."

And with oil prices making unscheduled trips above $118 barrel during the week, energy prices were not going to help matters in the near term, though J.P. Morgan strategist Thomas Lee predicted on Aug. 26 that the market has already seen the worst.

"There is no clarity on the health of the global economy, but we are still viewing July 15 as the low," he wrote, citing an uptick in the Conference Board's Consumer Confidence Index for July. The survey came in at 56.9, up from 51.9 in June and 51.0 in May.

But Jeffrey Kleintop, chief market strategist at LPL Financial, took on the elephant in the room, addressing the woes of Freddie Mac and Fannie Mae in an Aug. 25 report. He wrote that the July 15 trough may yet hold up as the worst of the damage to the market, but "with no conclusion to the [Fannie and Freddie] insolvency crisis, the lingering uncertainty may have a renewed negative effect on the markets."

With that cheery thought, happy Labor Day.

Also See:
Economy Still Hasn't Turned Corner, Experts Say
Spelling Out Risks With a W and 4 E's
Economy Eases Back From the Brink for Now