US Consumer Confidence Down Again

[Kidicious]

Just when things started to look better these numbers come out. Doesn't look so good now. Maybe the rebate checks will help a bit in the next couple of months, but I think not enough. There is a tremendous amount of money on the sidelines right now. I will be really interesting to see if it gets used or if it stays on the sidelines.

Consumers: The new skeptics

Another measure of consumer sentiment shows how labor market weakness threatens recovery.
July 29, 2003: 2:11 PM EDT
By Mark Gongloff, CNN/Money Staff Writer

NEW YORK (CNN/Money) - For months, U.S. businesses have been skeptical about the economy's prospects, despite the rosy predictions of economists, while consumers have continued to spend money, keeping the economy afloat.

But if recent surveys are any indication, those roles apparently have reversed -- just as businesses feel the first faint stirrings of optimism that the second half of 2003 will get a boost from tax cuts, low interest rates and more, consumers are beginning to voice their disappointment with the longest labor-market slump since World War II.


The latest consumer sentiment survey from the Conference Board, a New York research firm, was surprisingly weak in July, as consumers' comfort with the present and optimism about the future both crumbled under the weight of labor-market weakness.

"Ultimately, for the economic recovery to sustain itself, we have to see the labor market improve," said Ethan Harris, chief economist at Lehman Brothers. "As the tax-cut benefits fade, consumers will look for more fundamental reasons to spend money, and there will have to be some job growth."

More than 2.5 million jobs have been lost since March 2001, when economists believe a recession began. Though the recession apparently ended in November 2001, labor market weakness has continued.

[Japher]

I saw this. Good! I have more time to get some money into retail investment!

[Dis]

umm consumer spending is up. who cares about confidence when people are spending more?

sorry, the economy will not tank as you hope it will.

[Kidicious]

Originally posted by Dissident
umm consumer spending is up.

Not enough to create jobs.

[Defiant]

Where did you get your economics degree? How much exactly do we need to create more jobs and how many jobs are enough?

[Kidicious]

Originally posted by Defiant
Where did you get your economics degree?

CSU Fresno

Originally posted by Defiant
How much exactly do we need to create more jobs and how many jobs are enough?

I couldn't make any guess about consumer spending, but GDP will have to increase at about 5-6%.

[Kidicious]

I guess you could say that all things being equal consumer spending would have to increase by 5-6%

[Defiant]

You are probably going to get that much out of the rebate checks. 5-6% isn't unreasonable and doable.

[Kidicious]

Originally posted by Defiant
You are probably going to get that much out of the rebate checks. 5-6% isn't unreasonable and doable.

I seriously doubt it. They have already done surveys that indicate that the majority of people don't plan on making new purchases with it, and with confidence low that is a very strong possibility.

[Defiant]

But you have to look that the spending is up, if the trend continues, with lack of any other data, the logical conclusion is they will probably put it into the economy. Sure some will pay off bills, but I am looking at building a new shed in the back yard, I can't be alone. Simple question is there enough to do the follwing.

[Kidicious]

Originally posted by Defiant
But you have to look that the spending is up, if the trend continues, with lack of any other data, the logical conclusion is they will probably put it into the economy. Sure some will pay off bills, but I am looking at building a new shed in the back yard, I can't be alone. Simple question is there enough to do the follwing.

The checks are very small. They will prop the economy up for now, but little else.

[Defiant]

Wait, see and hope for the best, you flood the economy with that much money something should break loose.

[Giancarlo]

Originally posted by Kidicious


Not enough to create jobs.

Not at least in the short term. And the manufacturing sector posted strong results recently.

http://story.news.yahoo.com/news?tmp...c&sid=95609869

"The Commerce Department (news - web sites) said orders for durable goods -- items like cars and refrigerators designed to last three years or more -- climbed 2.1 percent to a seasonally adjusted $172.5 billion last month after being flat in May."

So kiddo is again overstating everything and acting like a communist.

[Defiant]

God knows I need a new car.

[Kidicious]

Originally posted by Fez


So kiddo is again overstating everything and acting like a communist.

Please don't call me that. I'm plenty old enough to be your father.

[Giancarlo]

Originally posted by Kidicious


Please don't call me that. I'm plenty old enough to be your father.

Call you what? I am just stating the truth. You act like a kid. You have the mentality of one.

Defiant, most Americans seem to be doing that.. buying new cars.

[Defiant]

I don't think Kid is overstating, what I am afraid of, is the media has more power than you think over our economy, they could incidentally cause a lack of spending. For instance, the news, "Consumer confidence drops an unexpected 7%", they don't go on to say, however, consumer spending is still high. Now alot of people get scared sh!tless when they read misleading indicators as such. Holy Crap I better hang on to my money because the entire economy is heading for the crapper. I truly believe economic news should only be stated for the previous year, never what last month did and surely not what is likely to happen, they have no clue.

[Kidicious]

Originally posted by Defiant
I don't think Kid is overstating, what I am afraid of, is the media has more power than you think over our economy, they could incidentally cause a lack of spending. For instance, the news, "Consumer confidence drops an unexpected 7%", they don't go on to say, however, consumer spending is still high. Now alot of people get scared sh!tless when they read misleading indicators as such. Holy Crap I better hang on to my money because the entire economy is heading for the crapper. I truly believe economic news should only be stated for the previous year, never what last month did and surely not what is likely to happen, they have no clue.

That would create more uncertainty and risk. It will never happen. Business likes to get info. Everyone does.

[Defiant]

Kid,
Don't get me wrong I understand why, its just sometimes misinformation is more dangerous than none, everything economically really does need to be looked at in the aggregate, not "what happened yesterday"

[Berzerker]

Hey Kid, how was consumer confidence in the USSR?

[Giancarlo]

Originally posted by Berzerker
Hey Kid, how was consumer confidence in the USSR?

Umm, the old soviet guard set the consumer confidence remember? Kid, you know the old soviet guard is not much different than you.

[mrmitchell]

I gotta tell you, as a US Consumer, I think the economy's in the shithole and China is going to launch a massive invasion force at us in 24 hours.

[Japher]

and China is going to launch a massive invasion force at us in 24 hours.

We'll be bombarded with cheap party favors!

[Giancarlo]

Originally posted by mrmitchell
I gotta tell you, as a US Consumer, I think the economy's in the shithole and China is going to launch a massive invasion force at us in 24 hours.

The Chinese Navy will probably break down before it gets 100 miles out.. I love your humor..

As a blood-sucking capitalist, I am telling you the economy is just fine. It'll hit some obstacles, but those will be overcome.

[:) Smiley]

Economics sure is messed up. We got one thread here and another there and another there about how people got to save money and spend less than they earn.

Then we got economists saying that consumer spending improves the economy. Maybe it does, if people are actually making more money than they are spending. What I don't see, though, is how deficit spending in personal finance is supposed to improve the economy of the USA. (It'll sure do much for East Asia though) Eventually people end up spending less because they have to pay off all their debt!

[GePap]

Big ticket items are still selling due to extremely low interest rates. The thing is that the fed can only lower rates, what? 75 more point? And that does not set the rates for all toher things, since Banks are NOT obligated to keep going down. Many have started to raise rates again, if just a bit.

August will be an interesting month.

[Velociryx]

Absolutely correct, Smiley. IF real purchasing power is outstripping inflation (which it isn't), then personal deficit spending is fine, because as a percentage of total income, it's not "really" much of a deficit (if at all). An increase in consumer spending, however, need not come at the expense of ALL of a household's discretionary income (ie - if I have $400 bucks left over each month after paying all my bills, I can spend half of that, still wind up saving some, and thus, increase consumer spending).

But the two things are inherently at odds with each other. Consumer spending does nothing to increase your economic position in the game. That is done purely through investment and savings. Consumer spending helps the economy, sure, cos more people are buying more stuff, but none (or very few) things in the "consumer market" are designed with increasing value over time--exception, if a thing gets very old (antique cars, etc), yes....those will increase in value over time, but the people shopping for an SUV this month aren't thinking about its value seventy-five years down the road.

-=Vel=-

[:) Smiley]

I will puke the day I see a SUV venerated as a classic car.

[Kidicious]

Originally posted by GePap
Big ticket items are still selling due to extremely low interest rates. The thing is that the fed can only lower rates, what? 75 more point? And that does not set the rates for all toher things, since Banks are NOT obligated to keep going down. Many have started to raise rates again, if just a bit.

August will be an interesting month.

Yeah. Interest rates have gone up some, but it hasn't had a significant effect yet. August will certainly be interesting.

[Kidicious]

Originally posted by Smiley
Economics sure is messed up.

Personal finance is not economics.