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Are You Confident In The Future Of The Economy?
This article originally appeared in The Daily Capitalist.
This is the time of the month when the consumer surveys come out measuring confidence in the economy's future. There are three large surveys: Conference Board, Gallup, and the University of Michigan. They all try to measure our belief as to the future, and specifically whether or not we feel like spending our money. Tuesday Gallup and the Conference Board came out--with mixed results. On Friday the University of Michigan/Reuters survey comes out. (It has been showing a rising trend for the last four months.)
Gallup does their own survey of 3,434 respondents. The result was that consumer confidence hasn't improved for a year:
Asked whether the economy was getting better or if it was poor, respondents answers were unenthusiastic at best:
The Conference Board had a different take on the future:
That sure looks good but, looking closely:
Optimism is no better now than it was a year ago, also suggesting that little progress has been made economically over the past 12 months. Up to this point in 2011, there seems to have been a relatively great amount of optimism about the U.S. economy going forward. Whether last week's deterioration in consumer confidence is the beginning of a new trend or just a short-term aberration remains to be seen.
Also, from the Conference Board's press release:
Those stating business conditions are “good” increased to 12.4 percent from 11.3 percent, while those claiming business conditions are “bad” was unchanged at 39.6 percent. Consumers’ assessment of the labor market was also more positive than in January. Those saying jobs are “plentiful” rose to 4.9 percent from 4.6 percent, while those stating jobs are “hard to get” decreased to 45.7 percent from 47.0 percent.
Consumers’ short-term outlook was more optimistic than in January. Those expecting business conditions to improve over the next six months increased to 24.4 percent from 24.0 percent, while those anticipating business conditions will worsen declined to 10.4 percent from 12.2 percent.
This is their best reading in three years.
I don't know if this makes a difference, but the Conference Board just fired its former pollster and hired Nielsen instead. They survey 3,000 respondents. Their survey is billed as a leading indicator.
Who do you want to believe? With 43.6 million Americans, or 14.1% of the population, on food stamps, relatively flat wage growth, and with a dour unemployment picture, I don't think that only 17.3% of Americans feeling better about their future income potential versus the prior reading of 15.3% really means that much. Ditto with those seeing business conditions improving going from 11.3% to 12.4%. 39.6% of respondents said they are worse, and the rest, or 48% see no change or have no opinion. Another way of saying this is that 87.6% of the respondents didn't have a positive view of business conditions.
The Conference Board's statement that "Consumers’ appraisal of present-day conditions improved moderately in February" is true but I would question its relevance. At such low levels of enthusiasm among its respondents, a point or two doesn't mean much. If you step back and look at what these results reveal, it doesn't look to me as if consumers are more optimistic about the future. To say otherwise is just spin. I think Gallup has the better view right now.
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It's been all over the media today how everything is bouncing back, retail, consumer confidence, etc. Saw it in a couple of newspapers and also heard on NPR's Marketplace show. What a load of crap.
I have never been disappointed in being a confirmed cynic, pessimist, and and flat out negative person.
But my timing sucks.
It's like, "Making elborate plans to be surprised". You know it's out there, but damned if you know soon enough, when, so that you can really score on it.
deleted
Who cares what the public thinks? They know nothing. NOTHING. 85% of Americans don't know who Harry Reid is. http://people-press.org/report/319/public-knowledge-of-current-affairs-little-changed-by-news-and-information-revolutions
The average person talks in buzzwords and sound bites. They can't justify any of their opinions. Their whole life revolves around celebrities.
The AVERAGE IQ in the US is around 98. http://www.sq.4mg.com/NationIQ.htm So 50% are below 98. Obama is going to teach them math and physics. Okey dokey.
Just out of curiosity, (I'm screwing with you rather than disagreeing) at what IQ level are you able to discern average from median?
Good point. In IQ testing, they seem to come out about the same: "On most tests, a score between 90 and 110, or the median plus or minus 10, indicates average intelligence." http://people.howstuffworks.com/question455.htm
Or maybe they are just being careless with terminology.
I think things have improved marginally since last year, but the degree of change has been minor. Nothing like what the government numbers show.
Had some experience with Gallup before, in a political poll, they framed the question in terms of the moment. How are you doing this moment? You can see it explained here. The other polls lean more toward confidence in the future. In this case I trust Gallup more, it measures how people are feeling right now, not how they feel about some indefinite moment in the future.
As fuel hit $3.40 in our area all I seen was deer in the headlights still as my coworkers still consider me uneducated. Sorry, only 3 years college and we keep all things working. Water, Wheat, and Wiskey. Our area is barely hanging on. No power till friday in many areas. As was said, a 3 dog night. At least its double digit on the thermometer as I write since we only lost power a few days... America, wake up since you make what? Our Company has seen difficulty's. We adjusted some product lines to other areas on the Globe. Yea we know why, and glad we did to stable areas on the planet. Like the old line goes if you feed pidgeons to long what do they leave you since they do not care for themselves. As for water and wheat I hope Asia "Russia" can export since you see the complication's from last year crop issues. As for confidence? To many people miss the point what happened last year to see today anyway.
Hmmm, it's almost like there's a random word generator humming away in the background of that.
Hey, Michigan! Got education?
the conference board is managed by the same turds who said landon and dewey would win by landslides....
In my business sales are down 20%, material costs are up anywhere from 5% to 40%, and our overhead jumped 10%, mainly due to higher health insurance premiums.
Thanks Mr. Obama for "bending that cost curve", and thanks Mr. Bernanke for those "stable" prices. you guys certainly inspire me to have confidence in the future.
At the clinic my wife works in, there are a lot of nurses who work part time, flexible schedule for family, bring in some extra money, and get health insurance. Their premiums went up so much this year, that many of them now owe the clinic at the end of the month.
Mrs. Smith, meet your new neighbors: Mr. Rock and Mr. Hard Place.
sure !! we've got a great economy !! tons of $8.50 / hr. jobs .......... TARGET, WALMART, PANERA ...........there are not enough door greeter jobs for all us old people, tho ............WE NEED MORE WALMARTS !
They didn't ask me. My answer would be "fucking horrible."
I hate laying people off, making them pay more for benefits. Do it almost every damn Friday.
sheeple talk is more groovy to the ears than people talk...self fulfilling philosophy!
http://www.conference-board.org/pdf_free/press/TechnicalPDF_4134_1298367...
The change in pollster has boosted the confidence a little acording to the graphs in the link above.
What you do notice is the following :
The boost in expectations is nearly all in the under 35 age group. Which leads me to question whether this group are more susceptable to governmental views than analysis for themselves.
When the confidence is split across states there appears to be somewhat of a boost to areas with big financial institutions.
Most people think business conditions will be the same or worse and inflation will rise.
Low income and very high income people think conditions are improving whilst those in between disagree.
So you can summarise as follows.
Bankers think everything is improving and they will get bumper bonusses.
Those who don't follow economics closely believe the government hype that everything is improving.
Those most likely to about the economy think it is getting worse.
The only bright note is that the Pacific area looks a bit more confident, which may reflect local politics changes rather than anything else.
The state run media said it is better.
Do you dare say otherwise?
The old cynicism is gone...we don't need pessimism.
http://www.youtube.com/watch?v=C5No3c6FXUo
What a complete actor. A true thespian's thespian.
The conference board data is the Soviet Union all over again: "They pretend to tell us the truth and we pretend to believe them." But the truth is in the air, and one thing about truth, it's a sturdy son of a bitch. You can suppress it, but you can never kill it. People know.
+1
I'm confident this whole shebang is about to go over a cliff.
Vancouver BC...#1 world's most liveable city, Canada's Geneva
Canada's four western provinces w/ a plethora of natural resources and only 12.5 million citizens, led by gateway city, Vancouver BC....and the safest quadrant on the planet....
http://seenoevilspeaknoevilhearnoevil.blogspot.com/2011/02/vancouver-bcworlds-most-liveable-cities.html
I like to explain QE, and the Fed. to inquisitive fellow citizens like this; "I call it the Thelma and Louise government finance plan".
I'll take Gallup. We don't get out often, but when we do we can't go five minutes without someone bringing up the view that things are bad and going to get worse.
Extra cans of veggies in the grocery cart? Comment from the bagger: "Better stock up now while we still can."
Visit to a historical park? Comment from staffer: "Y'all should come back for one of the expos. They showcase old skills like blacksmithing and canning. Should be really useful soon."
Trip to the fabric store? Sewing instructor: "Stock up on cotton while you can; it's going to be through the roof soon."
People know. They may not want to say it to a surveryor, but they know. You can feel it in the air.
People who a year ago were sitting on the fence as to whether or not we were going to pull out of this are really beginning to climb off on the "we're screwed" side.
The old, "Don't piss down my back and tell me it's raining." line is becoming the theme. The average person is starting to doubt the numbers, and they are becoming afraid. I don't know if it's uncertainty of future, or fear caused by doubting a system they always trusted.
Scary shit's coming down the line.
i wish i could parrot back everything the cop i spoke to the other day said.....pretty sure he had to be a zh reader
as for the surveys, can you say statistical noise?
Don't leave us hanging; how about a little paraphrase?
I'm confident there's still an economy... does that count as optimism?
No, not at all.
Commodity prices have sky-rocketed.
Interest rates and the Yield Curve can only go higher, multiplying the pain (upcoming interest expense) for American citizens and businesses with USD-dominated debt.
Unemployment or underemployment (however you want to define it) continues to drag down private sector consumption and GDP.
The savings rate of Americans is insufficient.
Government entitlement programs are woefully underfunded, creating a coming reckoning day.
The political "leaders" of this country have led us into a very deep, spend-first-then-we-have-no-money-later-to-pay-the-bill hole.
The President of the United States knows nothing about economics and has lost the respect of other leaders across the world because his only experience is as a "community organizer."
Now, there are geo-political tremors spreading across the world, increasing the cost of mobile energy and the threat of war.
Europe is broke.
On top of that, pile on the cost of all energy and the limited amount of immediately-depolyable alternatives. (Yet, we have all this cheap coal in our backyard?!)
The Fed continues to wash away the purchasing power of the dollar.
Wall Street balance sheets are a complete mess and management accountability is almost non-existent.
Equity values have strayed from real fundamental valuation to a psychological valuation based on loose money policy.
We're heading right into a double-dip in the housing and construction markets.
Fannie and Freddie are very broke.
State and municipal governments are broke.
China controls the interest rate markets as they could slow down or stop buying our government debt at the same degree they have been and put the Federal government in a borrowing expense pinch.
And, we continue to remain vulnerable to terrorist attacks inside the USA. Risk of negative psychological effect causing slower economic activity.
All in all, it's not good.
Yes, it does; we're entering you in the category, "believes in improvement; thank you, Click", wait a minute, I was just joking, hello, hello?
More like hopium.
Confident in the economy? Well I don't know about anyone else, but I am confident in my personal financial situation, twelve months out. That said, the shit hammer could drop at any time, so I plan accordingly austerity-wise. Oh, wait a 'sec, that was a rhetorical question wasn't it? Being in a depression, of course the general economy is fucked. Who are you going to believe, the Bureau of Lying Statistics or your own damn eyes? Incidentally, food stamp usage may not be an ideal proxy for the economy. Not all foodstamps recipients would choose to work if they could. With few exceptions, said recipients are generally a deadweight core voting bloc of clients for the welfare state. Thus we will always have them with us. At least until the dollar dies. If you think the Libya uprising is bad, well, just wait for the gummint cheese riots of Cleveland, Detroit and Philadelphia. They're a gonna be fugly.
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