US consumers simply don’t believe that the US economy is recovering. That shouldn’t be surprising, considering that wages are stagnant, unemployment remains above 9%, and the prospects for the US economy are dim, if not downright gloomy.The Conference Board has released its Consumer Confidence Index for October and the number has plummeted from 46.4 in September to 39.8. The Present Situation Index dropped from 33.3 to 26.3. The first index measures consumer perceptions up to six months ahead, while the second measures perceptions of the current situation.
It’s pretty difficult to fault consumers’ perception given the recent weak news on housing , a stubbornly high unemployment rate, and some estimates of 2011 GDP that have fallen to below 2%.
Business confidence is down, consumer confidence is down, and there’s little reason to believe that there’s a miracle in store for the US economy. This is shaping up to be a less-than-festive holiday season.
Paul Ausick
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