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Guest Post: Surprise! Jobs Drive Consumer Confidence
Submitted by Lance Roberts of StreetTalk Advisors
Surprise! Jobs Drive Consumer Confidence
With the release of the Conference Board's consumer confidence survey this morning, we find that the index ticked down slightly in March to 70.2 from 71.6 in February. While the media sloughed off the decline by pointing to the increase in the present situation component, which rose to 51 from 46.4, what was less widely discussed was the decline in future expectations about the economy, which fell from 88.4 to 83.
While the month-to-month numbers tend to get the media all excited, or depressed depending on the direction of movement, the reality is that consumer confidence still wanes at very depressed and recessionary levels. Even after reported increases in employment, a 30% rise in the stock market, and a perceived solving of the Eurozone crisis, confidence has only reached the same point that it was at this time last year just before the Japanese earthquake and tsunami.
Have you wondered what really drives consumer confidence? The answer is simple. Jobs.
If consumers are to be confident about their future, they need to feel secure in the present and future employment. The chart shows (gold bar) the confidence gap, which is the difference between the present situation index and the future expectations index. The red and blue lines are the number of individuals surveyed who feel that jobs are currently hard to get or plentiful.
When confidence is high, so are the number of people who feel that jobs are plentiful. This is generally because they are currently employed and feel like they could get another job if they wanted one. The opposite is true today. This gap between jobs being hard to get and plentiful has closed slightly in the last couple of years; however, we are a long way from getting back to levels that are more normally associated with recoveries.
This gap has a spiral effect on the economy. When consumers feel like jobs are hard to get, they spend less or move down the discount ladder. In turn this decline in demand keeps businesses on the defensive and keeps them from hiring. In order for business to move items, they are having to resort to heavy discounting or incentives, which keeps pressure on profit margins. If there are increases in short-term demand, businesses either work current employees for longer hours, with relatively no increase in pay, OR they hire temporary help. With a large and available labor pool to draw from, the competition for jobs suppresses wage levels. While wages have remained stagnant, or declined, consumers are strained by the rising cost of energy and food, which reduces their ability to consume at a level that sufficiently increases end demand. Wash, rise and repeat.
This cycle is very difficult to break and has frustrated all efforts by the government to stimulate both real employment and the economy. While Ben Bernanke still feels that accommodative policies that stimulate the stock market will improve employment, evidence to date proves the contrary.
If you want to know what will drive employment, just ask a business owner. A recent survey by the Dallas Fed found that the single most important item to creating jobs were "sales". This is the same issue that the NFIB has brought forth repeatedly in the small business survey: "poor sales" is the number one concern of small businesses today.
The reality is that until consumers have deleveraged their balance sheets at home, consumption is likely to remain depressed far longer than most economists expect. While more rounds of liquidity injections by the Fed could certainly drive the stock market to historically high levels, it will be to the ire of Main Street as consumers suffer the fate of commensurate increases in energy and food costs that sap their ability to make ends meet.
Maybe its just me, or maybe it's time to try a different experiment.
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The only Bright spot for jobs is in the Black market.
RACIST!
http://annoyanidiot.blogspot.com/
I'm still wondering when 'white hispanic' became a RACE on questionnaires you have to fill out...
Good point!
If Jobs is supposed to drive Consumer Confidence then all hope is dead.
Too soon?
in modern world, your job is your farm. No job, no farm, no food. consumer confidence goes down because Food Network TV shows cannot prevent hunger.
Jobs is dead. Only 4 people got it? Back to the drawing board...
The only answer to the 'race' question on any form is 'Human'.
There are more than a few terrestrial bipedal humanoids to whom that classification doesn't apply.
Because leftists in America are starting to realize that our new Hispanic majority isn't going to put up with the savage subhuman behavior of blacks. Hispanics will brutalize blacks in ways that will make them long for the days of slavery.
So the propaganda war is on to convince Hispanics that they, too, are white and should feel guilty for slavery because all "white Hispanics" are dirty, dirty slave owning racists.
But it won't work. Blacks are savage animals that should be put down. And if there's one good thing to say about our new Hispanic majority, it's that they will end our "negro problem" once and for all.
That's why the white shoe boys running ops for the brain police out of the Southern Poverty Law Center (SPLC) reported to to congress that "white male college educated christians" fit the terrorist profile! Its all because of excess culture capacity,
Still trying to understand the one day boner the Bernanks telling of the tale (or is it tail?) delivered the market!
Perhaps we are witnessing "consumer over confidence". Understand, main street is not the consumer. Main street is the producer. The consumer are the banks and their close knit band of fellow white shoe boy dancing partners politically employed by the "producers" on main street.
Blow your harmonica son - There ain't no way to delay that trouble coming everyday. Time to whup up some dragon lotion for that pink donation to the Fistema in my dreams!
The problem is a "negro problem"? You're kidding - even church ladies ain't that lame - you're kidding - you got to be - because whites and hispanics are just negros with less pigment. I bet you watch "The Ten Commandments" and really really really beleive Moses and ancient Egyptians were "white" like they were in that schleppy POS propaganda.
If there is such a thing as intelligenct design, then there is surely "dumb ass" design when the main issue one espouses is the "negro problem". You like 3 decades behind Mr. Rumpelstiltskin!
You be trolling like a dumb ass provocateur informant in the wrong place like a limp dick SPLC wanna be if-en you shilling that "hillbilly negro problem" in deze necks of de woods.
Go steal a car and deal with your "negro problem" in the big house - be the first in your family to experience the big black snake crawling where the son don't shine problem. Your yard handle can be "I Benover for Mambas".
Negro Problem - you got to be kidding or dumb as a mouthfull of dragon lotion - sheesh.
Yup it is. And dumb too.
or weed basis, futures contracts? Maybe i should start that biz up?
http://www.priceofweed.com/
U got to admit this is almost as good as wheat or corn basis contracts... for something "illegal"
how about some CDS on those weed backed securities
100% agree with the article. And this sentiment.
Reason why I got into poker. And I *have* a job. But it pays no where near what I should be making for what I do, and therefore, I have to put my balls on the line on the felt to try and make a living that's comfortable for myself.
I go to Vegas every year for tha chance for that one big score. I've broken even 3 out of the 4 years, and a slight loss in another. All it takes is one ship.
I know others who deal on the side. Drugs, too :P Bartending is up amongst my friends, although I also know others who have good jobs, btu I don't press them on how much they make. We're all pretty much in debt.
Chaz Palmenteri's character said it best in "A Bronx Tale":
"The Workin' Man is a Sucker".
I got a job at McDonalds last month. Okay, it's only breakfast shift 4 days a week including weekends but hey, I make $146.00 per week now. My health care costs 786.00 per month si my job pays almost 1/2 . It costs me about $30.00 for gas to get there 4 times a week but I get meal discounts on shitty food. I still have about $700k in savings that's Berstinky is paying me $7,000 annually to hold. I figure if inflation stays at the current 9-10% I can make it til' SS kicks in. Then I'm on easy street. God Bless Amerika
"social security". that's a good one...
"I'm lovin' it!"
@azzhatter
Ha ha ha ha----you're joking of course, azzhatter,
because if you're serious,
you are true numb nuts
respectfully in either case om
$700K is enough to live a pretty good lifestyle for 100 years in parts of Asia. All the Filipino poontang you can fuck. Whatever age, shape, and size you like it.
Nobody with that kind of scratch would take a fast food job. Come on now.
whats that you say? real people are in tune with the real unemployment numbers? what a bunch of terrorists...
Tell you what FED, you give ME a unsecured credit line, I'll go buy shit. We'll see if some jobs magically appear.
Funny haha
“We are looking for the price to stay above $1,500 [an ounce] this year and above $1,400 over the next few years,” says Jeff Christian, Founder and Managing Director of the CPM Group
Yeah, but THEY touted that small businesses needed loans to increase hiring. So, they FED the BANKS up with cheap cash. Now that the bank have oodles of cheap cash and not lending a nickle to anyone who needs it, THEY now say it's a lack of demand that's holding jobs back. Why the fuck didn't THEY listen to US little people telling THEM what the matter was in the first place?
'Cause they don't give a shit about us ... they know what's really wrong, they just don't care.
Invest in lead ... the small amounts that you put down your barrel one at a time.
The Anglo economies cant grow without drastic deregulation and a return to the true free market. (This wont happen).
The PTB will not relinquish their grip over everything, therefore the only "Growth Substitute"will be "QE to infinity".
This will furthur exacerbate the decline of our society, into full central planning, inflationary, stagnation.
As mentioned in another post, the only real economy will be the shadow "cash economy"
As always happens throughout history the government drives the real economy underground through over regulation/ taxation/central planning/tyranny.
Then eventually people either starve (Zimbabwe/Cambodia) or revolt (France/ USA)
How many times must this sad cycle repeat?
The US Constitution was a nice first try, but now I'm afraid we are all going to have to re-sit the Exam.
Better luck next time chaps..
This cycle is very difficult to break and has frustrated all efforts by the government to stimulate both real employment and the economy.
here's the goobermint just doin the very best it can, and we're just not deleveraging our balance sheets fast enuf?
perhaps a little law enforcement, RIC0, triple fraud judgments, and prison might have helped? and maybe not "revamping" the banking system of the controls put in place to keep theDepression from recurring, like it HAS?
Yep, I'm kidding but I can see the future
timed out
No shit. I'm sure if Bernanke could he'd be throwing a people out of helicopters if he could get the economy started....... he already did it to the Retired and Seniors but they don't count....
Sometimes I think if the World War II generation wasn't so old or feeble or dead like my parents they would of gone up to Washington and kicked somebody's butt.... I feel I've let my parents' generation down by only protesting with a vote and not action. Sad isn't it.... Looking for a leader as Neil Young said in 2008, but as it turned out we had nothing but turds to pick from... except Ron Paul....
Nice correlation, too bad the PTB's are only interested in cooking numbers and bullshitting people while they march merrily deeper into hell!
looks like the Gulag Archipelago.