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According to Federal Reserve comments, consumers remain cautious and are limiting spending to essential items while they continue to reduce their outstanding credit, as total U.S. consumer credit fell for the sixth straight month in July. Sounds good, but let’s remember that our economy hinges on consumer spending.

Factoring in all this, it’s not all that surprising to find that economists and analysts downgraded their growth outlook for the domestic economy for the third month in a row despite better than expected jobs and manufacturing data last week. The key reasons for the negative revisions — stubborn unemployment and continued housing market frailty — are expected to slow Europe’s recovery as well.

Buckle up.

Chris Versace, the Thematic Investor, is director of research at Think 20/20, an independent equity-research and corporate-access firm located in the Washington, D.C., area. He can be reached at cversace@ At the time of publication, Mr. Versace had no positions in companies mentioned. However, positions can change.