Gallup Confirms Consumer Confidence Deteriorates Despite Recent Move Higher In Stocks
It may not have the pull of those two "other" consumer confidence polls (which always magically seem to beat expectations just when the market is about to roll over), but for sheer depth of polling, the Gallup look at consumer confidence arguably presents a far more detailed and accurate picture than either the Conference Board or the UMichigan index. And today Gallup is out with a report titled: "U.S. Economic Confidence More Negative Than a Year Ago - More Americans rate the economy as "poor" and say it is "getting worse" - of course, as this report is based on truthiness and not on birth-rate adjustments, the only places you may read about it are a variety of fringe blogs. Amusingly, even Gallup acknowledges that the primary driver of consumer confidence (which itself ends up driving stocks), is stocks themselves (they don't call it the dog wagging indicator for nothing) are the computerized and generally arbitrary moves in the stock market: "Despite the recent upturn in the nation's equity markets, Gallup's
Economic Confidence Index, at -34 during the week ending Sept. 12,
confirms a downward trend in consumer confidence that started in
mid-August." We don't expect this level of honesty and objectivity to be repeated in either of the soon to be released other "confidence" indicators, which is sad, because if consumers and investors realized that we have now gotten past the point where the natural ponzi drive of the market works (i.e., confidence correlates with the S&P, people may have been able to save a lot of money which they will otherwise lose in the S&P). But that does not fit with the Fed's agenda, so don't hold your breath on the truth finally coming out on this.
More from Gallup:
Although economic confidence in the U.S. appeared to be improving at
this time last year, just the opposite is the case in 2010. Consumer
perceptions of the U.S. economy are now substantially below the
depressed levels of a year ago.
More Rate the U.S. Economy "Poor" This September Than Last
During each of the first two weeks of this month, 47% of Americans
rated current economic conditions as "poor." While in September of last
year, fewer Americans were giving the economy "poor" ratings than was
true earlier in the year, that is not the case in 2010. In fact,
consumer ratings of current economic conditions are worse now than they
were a year ago.
More Say the Economy Is "Getting Worse" Than Did So a Year Ago
In recent weeks, 63% of consumers have said economic conditions are
"getting worse." These future expectations for the economy are among the
worst of 2010 and have deterioriated substantially from the improving
trend that held sway at this point in 2009.
Economic Confidence Is Not Heading in the Right Direction
Despite increased optimism on Wall Street that the U.S. economy will
avoid a double-dip recession, Gallup's economic confidence data suggest
consumer perceptions of the future course of the economy remain near
their lows of the year. Neither the Labor Day holiday nor the upturn on
Wall Street has been enough to shake consumers out of their doldrums.
The continued weakness in Gallup's Economic Confidence Index during
the first two weeks of September suggests that consumer confidence is
slightly worse now than it was in August. In turn, this implies that
Friday's Reuters/University of Michigan Consumer Sentiment preliminary
estimate is also likely to show a decline from August.
While economists may argue about the relationship between consumer
confidence and the economy, there is no doubt that declining consumer
sentiment is not good for incumbent politicians as they approach the
midterm elections. Worse yet, the current trend in economic confidence
continues to deteriorate and now trails that of a year ago -- making it
harder to argue that the economy is now heading in a better direction
than it was at this point in 2009.