Consumers, Wall Street disagree on economy

MSNBC via MSN ^ | July 27, 2010 | ANNE D'INNOCENZIO

[Uncle Ike]

WASHINGTON — The disconnect between Wall Street and Main Street is growing.

Americans' confidence in the economy faded further in July, according to a monthly survey released Tuesday, amid job worries and skimpy wage growth. That's at odds with Wall Street's recent rally fueled by upbeat earnings reports from big businesses such as chemical maker DuPont Co. and equipment maker Caterpillar Inc. That's because the pumped-up profits are being fueled by cost cuts like layoffs and overseas sales. In fact, big companies have shown few signs they're ready to hire.

{snip}

"Consumers have a much different view of the economy than the stock market does, and their views matter more to the economy," said Mark Vitner, an economist at Wells Fargo. The index "tells me the economy is heading for slower growth in the second half. We have low expectations for back-to-school."

Joel Naroff, president of Naroff Economic Advisors, agreed, noting that the fatter profits have shown that companies have been able to squeeze out higher productivity from workers, but that also means that "households are not benefiting."

[Son House]

Apples and oranges; Consumers got to eat everyday, while Wall Street can trade on research, facts, and rumors, ect

[AndyJackson]

while Wall Street can trade on research, facts, and rumors, ect

And virtually free money from the FED

[freedomfiter2]

I guess that’s because Wall Street got the bailout and real Americans got the bill.

[PGalt]

There has never been a greater disconnect between reality and the markets in America.

[CurlyDave]

Joel Naroff, president of Naroff Economic Advisors, agreed, noting that the fatter profits have shown that companies have been able to squeeze out higher productivity from workers, but that also means that "households are not benefiting."

While Joel probably understands this, it seems that few Freepers, and virtually none of the general public, recognize that a corporation's purpose is to provide a return to shareholders, not jobs to consumers.

Jobs are a pleasant side effect of many corporate activities, but they are only a side effect.

[jwalsh07]

Retail sales are sluugish. Inventories will grow, production will be cut back. IOW’s, no job growth for a long time.