consumer confidence

Recession Ends; Nobody Notices

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The National Bureau of Economic Research declared this week that the Great Recession ended over a year ago. Yet, for some reason, the average American isn't ready to break out the champagne.

"Every single one of the individuals who wrote the report needs a serious reality check," said Bob Johnson of the Queens borough of New York, who is 46, had worked in communications and has been looking for a job for more than three years.

The American working class is hurting. The unemployment rate is only marginally down from the peak and the economy has been losing jobs over the last three months. Households were $1.5 Trillion poorer last quarter, and $12.3 Trillion poorer than three years ago. Most of this is reflected in the crushed dreams of retirement. The poverty rate is at a 15-year high.

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Nevertheless, the economy is improving, right? That depends on who you ask.

Time to "Put some Jam on the Bottom Shelf where the Little Man can Reach it!"

"Put the jam on the bottom shelf so the little man can reach it," Sen. Ralph Yarborough used to say in the 1950s and 60s, when Texas still elected populist democrats to the Senate.

Well, it's time for Obama and the Congress to put some jam, in the form of stimulus and jobs (like a new WPA) in the reach of the little people, because if they aren't careful, the little people are about to get dragged back over the precipice into a chasm of wage deflation.

More evidence for the "Black September" consumer fear thesis

Here's how the NY Times described the "surprse" not-so-bad Fourth Quarter GDP yesterday:

The actual decline in the gross domestic product — at a 3.8 percent annual rate — fell short of the 5 to 6 percent that most economists had expected for the fourth quarter. But that was because consumption collapsed so quickly that goods piled up in inventory, unsold but counted as part of the nation’s output.

“The drop in spending was so fast, so rapid, that production could not be cut fast enough,” said Nigel Gault, chief domestic economist at IHS Global Insight. “That is happening now, and the contraction in the current quarter, as a result, will probably exceed 5 percent.”

(hat tip Ksho1)

Consumer Expectations Worse

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Consumer expectations are the worst since Dec. 1973 -- in the midst of Watergate and first OPEC oil price hikes

The Conference Board reported today that the expectations component of its closely-watched Index of Consumer Confidence plunged further in March to the lowest levels in 35 years – to December 1973. The overall index which measures both expectations and views on current conditions also plunged again in March to the lowest levels in five years, the eve of the invasion of Iraq in March 2003. (see attached graphic of overall index)

Today’s report shows almost four times as many consumers now expect fewer jobs over the next six months as expect more jobs. More than three times as many expect business conditions to worsen rather than to improve and only 14.9% expect their incomes to rise in the next six months.