Posted on 08/12/2011 8:11:47 AM PDT by RobinMasters
Confidence among U.S. consumers plunged in August to the lowest level since May 1980, adding to concern that weak employment gains and volatility in the stock market will prompt households to retrench.
The Thomson Reuters/University of Michigan preliminary index of consumer sentiment slumped to 54.9 from 63.7 the prior month. The gauge was projected to decline to 62, according to the median forecast in a Bloomberg News survey.
The biggest one-week slump in stocks since 2008 and the threat of default on the nation’s debt may have exacerbated consumers’ concerns as unemployment hovers above 9 percent and companies are hesitant to hire. Rising pessimism poses a risk household spending will cool further, hindering a recovery that Federal Reserve policy makers said this week was already advancing “considerably slower” than projected.
“The mood is very depressed,” said Chris Christopher, an economist at IHS Global Insight Inc. in Lexington, Massachusetts. “Consumers are very fatigued and very uncertain. In the short term, people are going to pull back on spending.”
Via U.S. Consumer Confidence Drops to Three-Decade Low Amid Economic Headwinds – Bloomberg
(Excerpt) Read more at educationviews.org ...
This news is bound to put a damper on the ‘recovery’...
Let’s see. Inflation is heating up, spending has been flat until this month, unemployment continues to over 9%. What’s to like?
Look at this guy’s pictures:
http://confoundedinterest.wordpress.com/
“Inflation is heating up, spending has been flat until this month, unemployment continues to over 9%. What’s to like?”
What I like is that Obama is looking like Jimmy Carter every day. Worst consumer confidence since Jimmah???? You have to be REALLY inept to post those kinds of numbers. And given such numbers, Republicans would have to be really inept to lose in 2012.
Actually this was in the first 4 months of the Reagan administration but it was most definately Carter’s economy.
(Reuters) - Retail sales in July posted their biggest gain since March, tempering fears that the world’s largest economy might be slipping back into recession.
LINDSEY PIEGZA, ECONOMIST, FTN FINANCIAL, NEW YORK
“It was a much stronger than expected report. We saw some nice upward revisions to June. There was a stronger than previously anticipated increase in retail sales. Going through the report, what also is interesting is the strength is very widespread across sectors. You see a lot of components that had been negative for quite some time actually bounce in July. Furniture, electronics, these have seen decreasing consumption for the past three months. Finally we see a pop in July. Like we saw in June, Perhaps this was a precipice for the consumer turning a corner.”
http://www.reuters.com/article/2011/08/12/us-usa-economy-retail-sales-idUSTRE77B2DS20110812
It’s all good!
My guess is the bump is back-to-school shoppers.
“Actually this was in the first 4 months of the Reagan administration”
“Confidence among U.S. consumers plunged in August to the lowest level since May 1980”
Last time I checked, Reagan was elected in November 1980 and didn’t take office until January 20, 1981. Jimmy Carter owned these abysmal consumer confidence numbers lock, stock and barrel.
This is not a great statistic.
On the other hand, if we think we are going to build the best economy we can by again having consumer-consumption representing 2/3rds of the domestic economy, we will get right back to where we started - borrowing to spend more than we earn, individually and as a nation.
What is needed is “capital formation” which means saving, whether as a business or as individuals.
We will never get the debt down - all the forms of debt - if “the nation” does not become frugal again.
That is the only way we will spend and borrow less and build the capital to make a larger portion of our acquisitions from our own capital, leaving ourselves less in debt.
So, if consumers spend less then fine, some Chinese workers will have to be laid off.
I stand corrected.
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