professional wordpress themes

Consumer Sentiment Plunges to 1980 Low

On August 12, 2011, in Consumerism, Economy, by Tim

The Reuters/University of Michigan consumer sentiment index plunged from 63.7 in July to 54.9 in the first of two readings for August as the debt ceiling debate, U.S. and European credit concerns, and tumbling stock prices drove the index to its lowest level since 1980.

As shown below, during the worst of the financial crisis in November of 2008, this index fell only as far as 55.3, so, along with renewed volatility on Wall Street, count this as another indication that the months ahead could be perilous.

The expectations component dropped from 56.0 in July to a near-record low of 45.7 in August and the gauge of current economic conditions fell from 75.8 to 69.3. Moderating gasoline prices saw inflation fears easing, the one-year outlook for consumer prices steady at 3.4 percent while five-year inflation was seen at 2.9 percent.

Coming on the heels of this morning’s better than expected report on retail sales last month, you can’t help but wonder if Americans have decided to adopt the attitude of “Eat, drink, and be merry, for tomorrow we may die”.

0 Comments
Leave a Comment

Tagged with: •  






American Consumer: “I’m Not Dead Yet”

On August 12, 2011, in Consumerism, Economy, by Tim

The Commerce Department reported(.pdf) that, after the slowest three months of spending in almost a year, Americans pulled out their wallets again in July and pushed retail sales up by 0.5 percent in gains that were broad-based.

Paced by gasoline station sales that rose 24 percent, overall sales were up 8.5 percent on a year-over-year basis in a data series adjusted for seasonal variations, but not inflation.

Auto sales rose 0.4 percent in July after a gain of 0.7 percent in June, continuing to rebound after supply disruptions in Japan during the spring. Excluding autos, sales were 0.5 percent higher last month after an upwardly revised gain of 0.2 percent the month before.

Despite moderating prices, gasoline sales rose 1.6 percent in July after dropping 1.7 percent in June and sales excluding both autos and gasoline rose 0.3 percent after a gain of 0.5 percent.

1 Comments
Leave a Comment

Tagged with:  

“Wealthy” Americans Less Optimistic

On June 29, 2011, in Consumerism, Housing, Our Culture, by Tim

What’s not surprising about this CNBC poll is that more Americans are more pessimistic about the U.S. economy, but, what is surprising is how they’ve defined “wealthy”.

Nearly two-thirds of the nation (63 percent) is pessimistic about the current state of the economy and its future, with just 6 percent optimistic about both. The attitudes of wealthier Americans—those with incomes greater than $75,000 or more than $50,000 invested in the stock market—are now in line or even more downbeat than the nation as a whole.

Just 26 percent of Americans with incomes above $75,000 believe the economy will get better in the next year, four points below the national average. In December, it was five points above. For the first time in the survey’s five-year history less than half of those with $50,000 or more in stocks think it’s a good time to invest in the market.

Over the next year, most Americans think home prices will fall and wages will drop as they spend less, save less, and drive less while the number of these “wealthy” individuals using credit cards to help make ends meet almost doubled from 12 percent to 20 percent.

4 Comments
Leave a Comment

Tagged with:  

What’s Wrong with the U.S. Economy…

On June 14, 2011, in Banks, Consumerism, Debt, by Tim

What is wrong with the U.S. economy can be easily surmised from reading the opening paragraphs in this story from the Associated Press, however, to most, this merely passes as conventional wisdom, wisdom that few realize is often wrong.

Stocks are shaking off a two-week slump after a report on retail sales wasn’t as bad as economists had predicted.

The Dow Jones industrial average, the Standard & Poor’s 500 index and the Nasdaq composite index are all on track to have their best day so far in June.

The government said Tuesday that retail sales edged down 0.2 percent last month, the first decline in nearly a year. That was slightly better than analysts were expecting. Americans bought fewer cars during the month, but the decline reflected temporary supply chain disruptions caused by the earthquake and tsunami disaster in Japan. Excluding weak car sales, retail sales rose 0.3 percent.

“The good news is the consumer is hanging in there,” said Rob Lutts, president and chief investment officer of Cabot Money Management.

At some point in the future, historians will marvel at how ordinary Americans watched the stock market go up and down – cheering its rise along with the mainstream financial media and lamenting its fall – in the mistaken belief that their economic well-being was somehow inextricably tied to it … well, it’s not.

Another mistaken belief these days is that, somehow, the over-leveraged U.S. consumer is still the main growth engine for the U.S. economy simply because, during the credit orgy of the last few decades, personal consumption rose to account for 70 percent of the economy.

During that same time, bank shares grew to record levels as a share of total stock market capitalization and, even after the events of the last few years, for some reason, most people think that we’re supposed to just pick up where we left off in 2008.

The era of economic growth fueled by expanding credit and consumer spending is over, yet so few seem to realize it (though another really good asset bubble could forestall a broader realization of this yet again).

2 Comments
Leave a Comment

Tagged with: • •  

Consumer Confidence Dips in December

On December 29, 2010, in Consumerism, Economy, by Tim

From yesterday’s monthly report on consumer confidence via Reuters and the University of Michigan, it looks as though rising stock prices have done about all they can do to lift the mood of the American consumer, a development that bears only a loose correlation to how much money they spend at the end of the year, goaded into action by retailers.

The consumer confidence index fell for the first time in four months, down from 54.3 in November to 52.5 in December, as job worries are hindering confidence if not consumption, holiday sales seeming to set new records every day. Not surprisingly, after rising over the last year, the percentage of respondents planning to buy a home is back to where it was a year ago, that is, when it looked like the housing rebound was more permanent.

0 Comments
Leave a Comment

Tagged with:  

More on the Black Friday Doorbusters

On December 1, 2010, in Asia, Consumerism, Our Culture, by Tim

Here’s another video of the Black Friday madness, this one spotted over at Zero Hedge and coming with some rather depressing (but mostly accurate) narration.

I’m not sure if I’d say the American society is now lost, but it’s certainly having problems finding its way in a world that is changing rapidly now that bubbles are inflating and bursting at an ever greater frequency.

6 Comments
Leave a Comment

Tagged with: •  
Page 1 of 612345...Last »
© 2010-2011 The Mess That Greenspan Made