The Recent Collapse In Consumer Growth Has Been WORSE Than The Great Recession

The Business Insider ^ | 10-4-2010 | Doug Short

[blam]

The Recent Collapse In Consumer Growth Has Been WORSE Than The Great Recession

Doug Short
Oct. 4, 2010, 3:32 PM

For the past several months, the Consumer Metrics Institute's Daily Growth Index has been one of the most interesting data series I follow, and I recommend bookmarking the Institute's website. Their page of frequently asked questions is an excellent introduction to the service.

The charts below focus on the 'Trailing Quarter' Growth Index, which is computed as a 91-day moving average for the year-over-year growth/contraction of the Weighted Composite Index, an index that tracks near real-time consumer behavior in a wide range of consumption categories. The Growth Index is a calculated metric that smooths the volatility and gives a better sense of expansions and contractions in consumption.

The 91-day period is useful for comparison with key quarterly metrics such as GDP. Since the consumer accounts for over two-thirds of the US economy, one would expect that a well-crafted index of consumer behavior would serve as a leading indicator. As the chart suggests, during the five-year history of the index, it has generally lived up to that expectation. Actually, the chart understates the degree to which the Growth Index leads GDP. Why? Because the advance estimates for GDP are released a month after the end of the quarter in question, so the Growth Index lead time has been substantial.

Has the Growth Index also served as a leading indicator of the stock market? The next chart is an overlay of the index and the S&P 500. The Growth Index clearly peaked before the market in 2007 and bottomed in late August of 2008, over six months before the market low in March 2009.

[snip]

[Sacajaweau]

You can't grow if the government is continually taking away a consumer's money.

P.S. Just got my new Bank Fees. Will be closing one account. Will write a check or use the ATM to withdraw money.

[blam]

Consumer Bankruptcy Filings Climb 11%

[TheThinker]

Can anybody say, “double dip”?

[November 2010]

Measuring deck chair positions on the Titanic?

: )

[mo]

The Parasitic Class..the bureaucrats and their social dependency, has come to believe, that due to “free money” from the Federal Reserve..that nobody has to work. The incentives for the bureaucratic class to create an environment conducive to business are gone since low interest rates are here.

[Frantzie]

Not good. This is going to be brutal.

I will laugh when the idiots who watch TV cannot buy Busch beer, ribs and the dope they smoke to watch ball games and other idiocy on TV. ALL of TV supports Obama and Islam. Fools think Saudi Prince Al Waleed’s Fox is any better. It really isn’t.

[caww]

Not only are they taking the consumers money...but as the Government takes eases money out of the banking systems it leaves less and less for businesses to borrow....the volumes of cash being paid to the Government for what was used to stabilize them, coupled with the real-estate losses and those yet to be, added in the overall risks they will no longer take....there is not much borrowing power for business and industry to operate....

It doesn't look even remotely good...won't be long before we see the affects occurring more and more.

[AngelesCrestHighway]

"It's in the can"....

[Osage Orange]

Well...will be able to buy wine, and steak?

[TheThinker]

So you finally found Obama’s birthplace?

[raybbr]

P.S. Just got my new Bank Fees. Will be closing one account. Will write a check or use the ATM to withdraw money.

Me too. They wanted me to sign up to cover any overdrafts on my ATM with a $34 dollar fee. If I didn't sign up they would simply deny the charge. Duh!

[caww]

I see the big “D” word coming ahead....at the least the first beginnings of.

Question is will the international financial gurus stand by and watch the US fall comletely? Well, as Euope and the Eastern countries...China etc. gain they may very well allow the US dollar to fall and land where ever it will.

A weakened united states is advantageous to many nations with asperations on the international scene.

[Fresh Wind]

Can anybody say, “double dip”?

[Frantzie]

All capital is being sucked up by the govt and banks writing off their reparations err... I mean write downs. It is reparations. People voted for this and support it by watching TV. ALL of TV loves Obama and Islam including Saudi Prince Al Waleed’s Fox.

[mo]

“Fools think Saudi Prince Al Waleed’s Fox is any better. It really isn’t....”

Come now...the good Prince is being charitable ...helping people “feel” better about what’s going to happen to them....

[Wuli]

The artificially (cheap dollar, easy credit, federal policy mandated) and long-term financially disastrous "housing boom" from the 1990s to 2005, was used as a "cash machine" to sustain consumer spending even when wages were not growing that fast. Now the bill has come due, the correction in true property values will take as long to settle out as the inflated value took to create, and until real wages start to grow again, consumer demand will not; at least not at any greater rate than working-job growth generally. U.S. Manufacturers need to focus on exports more than they have in the past.

[blam]

Thoughts On The Greater Depression

[ex-snook]

After years and years of exporting jobs, maxing out credit cards, and the end of the home ATM, what the hell should be expected. The coffers are dry, nothing left so consumption is going down and down and down and it isn’t going up until we employ people to make more of what we import.

[cicero2k]

I will laugh when the idiots who watch TV cannot buy Busch beer, ribs and the dope they smoke to watch ball games and other idiocy on TV.

From "Bread and Circuses" to "Beer and Football". How far we've come. To those not familiar with the phrase, here's some of what Wikipeia says about it:

This phrase originates from Rome in Satire X of the Roman poet Juvenal (circa 100 AD ). In context, the Latin phrase panem et circenses (bread and circuses) is given as the only remaining cares of a Roman populace which has given up its birthright of political involvement. Here Juvenal displays his contempt for the declining heroism of his contemporary Romans.[1]: Roman politicians devised a plan in 140 B.C. to win the votes of the poor; By giving out cheap food and entertainment, politicians decided that this policy of "bread and circuses" would be the most effective way to rise to power.