Bloomberg Consumer Confidence Shows Americans Most Pessimistic About Economy In Two Years
While there haven't been many economic data points to highlights the so-called damage to if not the economy, then the confidence of the all important US consumer, data on consumer confidence has been trickling in, and as expected, has been sliding. However, nowhere more so than in the just released latest read in the Bloomberg Weekly Consumer confidence index, whose expectations gauge just tumbled to -31, or the lowest level since November 2011. Bloomberg reports: "Americans in October were the most pessimistic about the nation’s economic prospects in almost two years as concern mounted that continued political gridlock will hurt the expansion. The monthly Bloomberg Consumer Confidence Index expectations gauge plunged to minus 31, the lowest level since November 2011, from minus 9 in September, a report showed today. The share of people projecting the economy will worsen jumped by the most since the collapse of Lehman Brothers Holdings Inc. five years ago. The weekly measure of current conditions fell to minus 34.1 in the period ended Oct. 13, the weakest since March."
Some of the other sliding indicators:
- State of the Economy index worsens to -65.3 from -60.2
- Personal Finance index fell to -0.1 from 4.7
- Buying Climate index fell to -36.9 from -33.5
- Polarization Index (Democrats minus Republicans) at -1.6 from -1.3
- Larger value means greater the divergence in confidence by political affliation
Oddly enough, even the uber rich felt less confident:
- Index for people with incomes above $100k fell to 14.0 from 19.0
More from Bloomberg:
The legislation passed by Congress last night to raise the debt ceiling and fund the government into 2014 may be setting the stage for another round of confrontations early next year. The fiscal impasse in Washington has spared few as today’s report showed consumers across almost all demographic groups grew increasingly distressed.
“The government shutdown has resulted in a startling decline in consumer sentiment and likely business sentiment that will result in a much slower pace of consumption and capital expenditures in the current quarter,” said Joseph Brusuelas, a senior economist for Bloomberg LP in New York. “Should lawmakers kick a decision into early 2014, it is likely that consumer sentiment will keep deteriorating.”
Still, considering the shutdown wasn't really a shutdown, but really an extended vacation, the markets were higher at the end of the "closure" period, and DC was just as dysfunctional during its shutdown than when it operates, we have trouble with the idea that someone, anyone said to their significant other: "honey, let's not buy that [House/iPad/Tesla Model S/1000x P/E stock] because the government is shut down."
However, in a Keynesian world, apparently that's how things work.
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