Bloomberg reports that:
Confidence among U.S. consumers rose this month to the highest level since September, reinforcing signs that the worst recession in half a century is abating.
….
“Consumers are looking at things like the rise in stocks, they are listening to reports talking abut ‘green shoots’ and they believe it,” Chris Low, chief economist at FTN Financial in New York said in an interview with Bloomberg Television. “They believe that a recovery is coming but they don’t see it in their current job prospects.”
….
The Reuters/University of Michigan index of consumer expectations for six months from now, which more closely projects the direction of consumer spending, rose to 69.4 in May from 63.1 the prior month.
Consumer confidence about expectations is one of the "official" leading economic indicators, and this level of confidence has only been matched one other time -- last summer -- since the onset of the recession.
That's the good news. The bad news is, they aren't putting their wallets where their expectations are. After a 4 week hiatus in reporting, Shoppertrak tells us that lst week:
show[ed] a year over year decrease of -3.0% compared to the same week in May '08. The May month to date estimated run rate for ... Retail Sales decreased -3.6% compared to the same weeks in May '08
Shoppertrak accurately foretold better than expected retail sales rebounds in January and February, and also accurately foretold the consumer return to hibernation in April. There is every reason to believe May retail sales will also reamin lower than last year.
Increasing gas prices, based on $60+ Oil, are not helping.
The bottom line: a few months from now may be better, but right now consumers are still holding on to their wallets.
Comments
Scheen Groots, Eh?
Anyone paying the least attention to the way in which economic events are interpreted - as opposed to being reported - by our controlled media, readily grasps how the notion of "green shoots" ever had an opportunity in present circumstance of finding its genesis. At Bloomberg, one would find it odd not to encounter a news entry along the lines, "New unemployment claims at 630,000, down 3,000, in sign recession is close to ending". The daily hammering one gets with this kind of oafal eventually leads one to a visceral suspicion of almost anything reported at such sites. The whole thing is cut from the same cloth that fashioned public support for the phony casus belli that became war with Iraq and is now threatening to become the same with Iran. Next they'll be pulling some poor, unsuspecting, dark complected schlub out of an apartment in Jersey City, and waterboard him into "confessing" involvement in a conspiracy to place an Iranian neutron bomb in the cellars of the Chrysler Building. And AIPAC Stephin Fetchit, Barak Obama, will be soiling his pants in his haste to commit unheard of levels of new troops to the the Iraqi border with Iran so as to defend "American interests".
If you're looking for a little truth in reporting on the economy, read Michael Hudson, Mike Whitney and Paul Craig Roberts over at CounterPunch. Maybe you'll get angry enough to join the mass demonstations when unemployment - even as it is presently calculated - tops 12%.
we read them
and we've called for mass demonstrations chanting jobs, jobs, jobs, jobs. But even cooler, we go to the original statistics and look at them instead of just media reports.
The reason "consumer confidence" is a leading economic indicator is the nation's economy is 70% consumer. Of course I think that's absurd and we need to restructure the economy into a production and innovation economy, not just something out of the coneheads.
So, what is most interesting from NDD's post here is how consumer confidence and the actual buying of mass quantities is divergent.
It's not correlated, which as far as I know is new, although I would have to see a graph/stats on sales vs. consumer confidence over time.
On unemployment, you are right they sure spun the beyond belief official unemployment numbers as a sign the recession is peaking or at the peak. On the other hand, unemployment is a lagging economic indicator.
But, the concept of a jobless recovery is also something we are hammering on EP.
Good plug for counterpunch, Paul Craig Roberts.
Getting It Back Without Getting It Back
Robert,
Try as they might, bankster fronts, Summers, Geithner et al, simply won't get their desired bubble back. The truth seems to stay just ahead of their manipulations, witness the rate spreads earlier this week. And perhaps one of the biggest scams of the last couple of decades, the "get-an-advanced-degree" con designed to support the six-figure lifestyle of professorial academia, would seem about to come apart. One hopes it strikes the law and "journalism" schools the hardest. If we could incarcerate the entire political class and create a gulag for lobbyists, perhaps we could then embark upon a genuine program of reindustrialization. God knows we need such a program. I'm all for dealing decisively with the people at the core of today's problems before we begin to treat the effects, however. There's a right order to these things.
you're in the right place
Because if there is a consensus of perception on EP it is trying to recreate a bubble economy is a really, really bad idea.
You're in the right place of outrage too. (Gulag).
I've thought they should call out the national guard, put a moat, barbed wire around D.C., call it the "no lobbyist zone" and create a "Berlin wall" of no lobbyists, take back the city.
A good example of the theory of reflexivity.
Consumer sentiment/confidence is reflecting the stock market and Stock market is seeing consumer sentiment/confidence. But the reality is that people are either still deleveraging and are not in a position to spend.
RebelCapitalist.com - Financial Information for the Rest of Us.
Spurious Third Variable
I offer an alternative explanation.
Consumer confidence may be increasing - but perhaps purchasing power is declining - due to either lost jobs or credit roll backs.
I offer Federal Reserve: Consumer Credit Stats. Consumer revolving credit fell a record $11.1B in March.
This could either be due to consumer activity (closing high interest accounts) or bank activity (rescinding credit lines). Either way,the result is less purchasing power.
These stats are prior to banks being forced to re-capitalize and prior to the Credit Card Reform passing - both of which would have worsened the conditions in March.
You can feel good
and still be poor and in a bad situation where you aren't buying anything. Many folks felt positive when Barack Obama was elected, that still didn't change the dire financial situation many where in.
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