Gallup

How can so many Americans believe that we’re in a depression, when the stock market and commodity prices have been booming?

For anyone wondering why a hypothetical situation in which Bill Dudley met with former colleague Jan Hatzius and told him "ok, we bailed you guys out, now it's your time to kill oil" seems all too possible in our day and age, the latest news on the economy from Gallup should make it all too clear. As of April 11, the polling agency's Economic Confidence Index has dropped to -37: the lowest reading since August of 2010. It appears that disgust with $4+ gas (Poverty Effect for all) is more than offsetting Brian Sack's attempt reclaim the Russell 36,000 (Wealth Effect for some). Gallup's conclusion is absolutely spot on: 'Global events, continued political battles about the budget in the
nation's capital, and a weak, if modestly improving job market add to
consumer uncertainties. As a result, it is not surprising that consumer confidence plummets even as Wall Street continues to do well. However,
if consumers continue to lack confidence and spending doesn't increase,
it is hard to see how the U.S. economy can continue its modest
improvement. In turn, it would seem Wall Street and Main Street will
have to align at some point going forward. Either Wall Street will prove
right and economic conditions on Main Street will improve or the
reverse will prove to be the case."

After Gallup confirmed that the February NFP data was doctored just enough to allow the Fed to decide what to do with March employment data (should QE3 be determined necessary, look for a huge miss to expectations), today the polling company confirms that recent 3 year highs in consumer confidence were an inflection point. "Gallup's Economic Confidence Index worsened to -24 in February from -21 the prior month as Americans' optimism about the U.S. economy receded from a three-year high reached in January. Gallup's weekly economic confidence data show that consumer optimism hit a new weekly high in mid-February but fell sharply during the second two weeks of the month. As a result, the decline in optimism reported for the month is an average bolstered by relatively high confidence early in February. Recent events are not encouraging as far as the economy is concerned. Soaring gas prices, budget battles in Washington, D.C., as well as in many states, and recent declines on Wall Street suggest that Gallup's most recent weekly measure of -29 for the week ending March 6 may more accurately reflect current consumer confidence than February's monthly average." This is very surprising: don't consumer still not realize that the only thing that matters is core CPI, and that is indicating deflation is still a huge threat to Wall Street's record bonuses? What is just as surprising is that the deterioration in outlook was spread evenly across social classes, age groups and political affiliations.

On one hand we have the Department of Truth about to tell tomorrow that NFP based on various seasonal and birth death adjustments increased by 250,000. On the other hand, we have Gallup which actually does real time polling without a procyclical propaganda bias. And Gallup does't have any good news: "Unemployment, as measured by Gallup without seasonal adjustment, hit 10.3% in February -- up from 9.8% at the end of January. The U.S. unemployment rate is now essentially the same as the 10.4% at the end of February 2010." And the one indicator that nobody in the mainstream media will touch with a ten foot pole: "Underemployment, a measure that combines part-time workers wanting full-time work with those who are unemployed, surged in February to 19.9%. This resulted from the combination of a sharp 0.5-point increase since the end of January in the percentage unemployed and a 0.5-point increase in the percentage working part time but wanting full-time work. Underemployment is now higher than it was at this point a year ago (19.7%)."

It was just earlier this week that a bunch of irrelevant confidence trackers said that US consumer confidence had hit 3 year highs. Oddly enough, ground data not only does not confirm this data, but says it is merely more baseless propaganda. According to Gallup, which actually knows how to poll, "Americans have become much less confident in the U.S. economy over the
past two weeks, with Gallup's Economic Confidence Index falling from -18
to -30 during that span. The -18 Index score from two weeks ago was the
most positive Gallup had measured in the last three years." And as we suspected when we reported the latest confidence data "These results ... indicate the Thomson Reuters/University of Michigan Index of
Consumer Sentiment, released Friday but based mostly on interviewing
from early and mid-February, was essentially out of date when it was
released. The Index of Consumer Sentiment showed consumer confidence to
be the highest it has been since January 2008, similar to what Gallup
showed two weeks ago. But Gallup's latest weekly update suggests
consumer confidence has fallen back to where it was in early December." Luckily bad news no longer matters, because if it did Gallup's forecast would guarantee QE3,4, and so forth: "The short-term prospects for a turnaround in consumer confidence do not appear great, with gas prices likely to continue to rise, with state and federal governments facing increasingly difficult budget situations, and unemployment remaining high."

Following this week's ebullient ADP private payrolls report, the sellside has succumbed to an orgiastic frenzy suggesting that tomorrow NFP number may be as high as 580,000 (as reported earlier). While there is no chance on earth of that happening absent all of US data gathering to have been outsourced to Beijing, what is more interesting, is that organizations which track employment trends in real time have found that neither is ADP's optimism justified, nor is there absolutely any basis to expect a blow out NFP number tomorrow. Gallup has found that not only did the unemployment rate increase in December from 9.4% to 9.6%, that disgruntled part-time workers who want full-time work increased from 8.6% to 9.4%, the highest since September, but that the most important metric in a labor force increasingly consisting of part-time workers, underemployment, has surged to 19%, the highest since June!

The hits just keep on coming for the administration's failed economic policies. While everyone is focused on tomorrow's NFP which will likely indicate a 9.9% unemployment rate, Gallup today confirmed that the unemployment rate has once again pushed into double digit territory. "employment, as measured by Gallup without seasonal adjustment, increased to 10.1% in September -- up sharply from 9.3% in August and 8.9% in July." Conveniently for the BLS, the deterioration in labor markets occurred late in September and will likely not show up until the October report: "Much of this increase came during the second half of the month -- the unemployment rate was 9.4% in mid-September -- and therefore is unlikely to be picked up in the government's unemployment report on Friday."

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.

Gallup presents some troubling statistics for the democrats as we approach mid-term elections (a mere three months away). In a nutshell, the party of a president who has a sub-50% rating into midterms, has lost, on average, 36 seats since 1946. Alternatively, presidents with a popularity rating over 50%, lose just 14. As Gallup says: "The clear implication is that the Democrats are vulnerable to losing a significant number of House seats this fall with Barack Obama's approval rating averaging 45% during the last two full weeks of Gallup Daily tracking. The Republicans would need to gain 40 House seats to retake majority control."

Even as the increasingly more unreliable UMichigan consumer confidence index surged more than expected in June, to the highest reading in two years, in yet another doctored attempt to stimulate consumers to buy assorted trinkets they don't need and max out their credit cards, a comparable, and traditionally much more comprehensive Gallup polls, paints a vastly different picture. As the chart below demonstrates, the spread between those who see the economy as getting better (32%) and worse (63%) has hit 31, and is threatening to break out the highest reading recorded in the past year. It is no surprise that with nobody trading at all, US stocks are back to their old trickey of spiking ever higher on no volume and on increasingly worse news out of Europe, and not to mention on an atrocious NFP and retail saels report for May, both of which are now promptly forgotten.

Reports from the Labor Department today showed companies in the U.S. created more jobs in March than at any time in the past three years. Nevertheless, behind the rosy headlines, data from the Bureau of Labor Statistics also give a grim side of the employment picture.

Just in case anyone needed confirmation that the DOL data is just a little, how should we say it, cooked, here comes Gallup with their March 15 undermployment number, which just hit a 2010, and series, high of 20%. This is obviously worse compared to both the beginning of the year (19.5%) and February (19.8%). Unlike the Dept of Labor's arcane voodoo which lately is based more on executive confidential memos and snowfall observations, Gallup's underemployment measure is based on more than 20,000 phone interviews collected over a 30-day period and reported daily. Furthermore "Gallup's results are not seasonally adjusted and tend to be a precursor of government reports by approximately two weeks." We wonder if the abnormally hot March weather will used as an excuse for a deterioraiton in the most recent NFP numbers.

As if anyone needed more reasons to doubt the data coming out of our government. Earlier today the Commerce Department reported that January retail sales data came at a nice and bubbly 0.5% sequential increase, and an even nicer and bubblier 4.7% YoY. This presumably beat expectations which were looking for a sequential beat of 0.3%. Yet here comes the much more reliable Gallup data to throw some salt in yet another economic data fabrication. According to daily Gallup consumer polling, which due to its lack of proximity to the government propaganda complex is vastly more reliable, the January average data showed a decline of 5.8% over January 2009 and a whopping 16.3% decline over December. This is beginning to parallel the ever increasing divergence between the ABC consumer comfort index and the UMichigan index which lately seems to only track the average leve of the S&P over the prior month.