Speaking to state legislators, Federal Reserve Chairman Ben Bernanke detailed specific areas in the economy that are still weak and holding back full recovery.

Among them are:

• Topping the list is high unemployment and a weak housing market. Speaking to this point Bernanke said: "We have a considerable way to go to achieve full recovery in our economy, and many Americans are still grappling with unemployment, foreclosure and lost savings."

Wall Street has been on a tear lately. The major indexes gained 7% during the month of July. That's coming off a 14% decline in May and June. Trading volume was light, about 7.63 billion shares, compared with last year's 9.65 billion. Advancing stocks outnumbered losing stocks by a three to two margin. The S&P 500 is barely squeaking above its 200-day moving average.

Traders are torn between strong earnings and weak economic data. For the most part, earnings of major corporations topped analysts' estimates. But the numbers on the economy show that the recovery is slowing.

Austerity measures in Europe, and concerns that U.S. job growth will be inadequate (below 150,000 new jobs per month) in the third and fourth quarters, has understandably increased concern about a slowing U.S. economic recovery.

But are the stars starting to line-up for something worse than that, from a macroeconomic standpoint, such as a double-dip recession? Perhaps not. Here's why: historically, an inverted yield curve precedes a double-dip recession. So far, the yield curve is not close to inversion.

To be sure, it was not a week for the bulls. Data for job creation, jobless claims, and manufacturing are signaling an economic slowdown.

However, one experienced observer of economic activity is arguing that all is not lost yet, regarding the still-young U.S. economic recovery. Former U.S. Federal Reserve Chairman Alan Greenspan argued that the recovery is undergoing a "typical pause" that will be structured by the performance of the stock market, CNBC reported.

The Labor Department announced Thursday morning that U.S. consumer prices dropped 0.2% in May. May was the second-straight month in which prices dropped, as prices fell 0.1% during April as well. The price drop was precipitated by a 2.9% drop in energy prices, a result of lower gasoline prices.

Although energy prices dropped, the core CPI, which excludes food and energy prices, increased 0.1%. This slight increase was only the second monthly increase this year, and it matched the consensus estimate.

In order for the current U.S. economic recovery to continue, people are going to need to spend. But in April, consumer spending had its weakest showing in the past seven months.

Consumption was flat for the month, despite rising incomes, as consumers opted to stash away their money in savings instead of running out and spending it. The savings rate jumped to 3.6% for the month, up from 3.1% during March.

Many investors know about the 'frugal consumer' trend: with incomes stagnant, budget-conscious Americans are find ways to cut expenses, and in some cases eliminating purchases altogether. The above is understandable for any individual/household that's suffered a reduction in income.

But now it appears that even middle class Americans and/or others with incomes that have not be pinched by the recent recession are ending their free-spending ways, the Associated Press reported Monday.

The consumer is back! Consumer spending rose 3.6% in March. Economists had only expected a 0.6% increase.

Our economy desperately needs consumers because they represent 70% of GDP.

Specifics from this consumer spending report include:

According to the Commerce Department, consumer spending increased in March by the largest amount in five months.

Consumer spending increased 0.6% in March, which matched expectations. While this is the good news, the bad news is that the gains appear to have been driven by a depletion of savings, which dropped to the lowest level in 18 months. The personal savings rate fell to 2.7% of post-tax incomes, the lowest level since September 2008. Personal incomes increased a mere 0.3%, which presents concern about minuscule income growth.

When you think Levi Strauss & Co., the first number that probably pops into your head is "501." After all, that is its signature blue jeans line. But there's a new number dominating talk about Levi's right now: $198. That's how much Levis thinks it can command for a new line of high-end jeans at retailers in the U.S.

Whether Levi Strauss & Co. can rebrand itself as a premium clothing company and cash in on this lucrative segment of the clothing market is a complicated question. But if it does so successfully, will Levis be dressed up for another reinvention -- this time as a publicly traded company via an IPO?

Consumer credit dropped in February, falling by $11.5 billion. Economists had predicted only a $700 million decline. the drop was the 12th in 13 straight months.

Americans practically closed their wallets. compared to their lavish spending habits of the past. This is an important shift, since consumer spending accounts for 70% of GDP. Here is a breakdown of the numbers:

Auto retailer CarMax Inc. (KMX) will be reporting its fourth quarter numbers tomorrow, and Wall Street is looking for further signs that the struggling auto industry is continuing to rebound.

Going into tomorrow's earnings release Wall Street is expecting to see the company show earnings of $0.25 per share. During the same period last year the company reported earnings of $0.17.

The key data point in January's U.S. personal income and consumer spending data?

Well, the 0.5% increase in consumer spending (0.3% after adjusting for inflation) was encouraging -- it was the fourth straight monthly increase in consumer spending -- and the 0.1% in personal income was low -- but at least it wasn't a decline, however perhaps the most compelling data point concerned U.S. inflation.

The Commerce Department gave us a nice little surprise this morning, revising up its fourth-quarter estimate of the Gross Domestic Product. Economic activity grew by 5.9% during the fourth quarter, which was the fastest rate since the third quarter of 2003. Last month, the Commerce Department estimated that the GDP rose by an annual 5.7% during the fourth quarter.

Here is the thing, this figure was in line with expectations of economists, so all of the glad handing may be a bit premature. Inventory liquidation slowed more than experts expected, which contributed the most percentage points to the GDP since the fourth quarter of 1987. Business spending increased 6.9%, which was far better than the earlier estimate of 2.9%. It added 0.62 percentage point to the GDP.

Mastercard (MA) reported that consumer spending rose 3.6% in January, showing consumers were spending modestly.

It's interesting, the focus that there is on consumer spending in America. Consumer spending is looked at as a holy grail of pushing the economy forward. Stimulus checks and cash-for-clunkers programs are a few of the recent programs that have highlighted this thinking. Ultimately, though it is investments in capital goods and services that have a profound effect on the long-term productivity and welfare of a people.