Guest Post: What "Average Joe" Really Thinks
Submitted by Lance Roberts of StreetTalk Live
What "Average Joe" Really Thinks
Every day we are blugeoned with a variety of economic reports from various government agencies about the state of the economy. Most of these reports have some form or another of "seasonal adjustments", speculations, estimations or just flat out "guesses" about what is going on in the economy. What we tend to find out over time is that these numbers are generally overly optimistic during recessionary periods as we are in today.
Today, we are going to look at three different polls from the Gallup organization on consumer spending, the economy and employment. The Gallup organization has studied human nature and behavior for more than 75 years and focus on what people "think and feel" about various issues. They employ many of the world's leading scientists in management, economics, psychology, and sociology, and other consultants to identify and monitor behavior.
The key difference between Gallup and the various government agencies is that these polls are direct questionnaires to individuals and the responses are tallied and reported. There are no adjustments, assumptions, guesses, etc. In the famous words of Bill Clinton; "What is...is."
Consumerism
So, with that in mind, let's start by taking a look at the consumer spending poll. In the recent 3rd quarter GDP report we saw the personal consumption expenditures made up a very large portion of the increase in GDP. While the media trumpeted the consumption as a return of the consumer the reality was it was spent on utilities and healthcare rather than "other" types of consumption.
This clearly shows up in the consumption spending of average Americans that were polled by Gallup. The consumer spending poll tracks the average dollar amount Americans reported spending or charging on a daily basis NOT COUNTING the purchase of a home, auto or normal household bills. Therefore, this survey strips out the spending on utilities and focuses on the actual purchases of "stuff" that drives final demand for businesses. As you can see there has been virtually no movement in the index since the recession took hold in the U.S. which is indicative of their attitudes that we never left a recession to start with.
More importantly, the index was at 81 at the beginning of July when 3rd Quarter GDP started and ended the 3rd Quarter period at 59. So, while GDP reported a surge in Personal Consumption Expenditures (PCE) in the first "ESTIMATE" of 3rd quarter GDP; the Gallup survey of consumers actual spending patterns DECLINED by 27% during the same period.
Employment
Not surprisingly, employment plays a big factor in consumer spending. If the consumer is unemployed or underemployed they tend to have less money to spend. Therefore, this shows up in consumer spending patterns. While the Bureau of Labor Statistics does a lot of estimating with seasonal factors and "birth/death adjustments" when reporting employment and unemployment in the U.S.; the Gallup survey simply asks individuals in they are under-or unemployed.
Gallup's U.S. employment measures report the percentage of U.S. adults in the workforce, ages 18 and older, who are underemployed and unemployed, without seasonal adjustment. "Underemployed" respondents are employed part time, but want to work full time, or they are unemployed. "Unemployed" respondents are those within the underemployed group who are not employed, even for one hour a week, but are available and looking for work. Results for each 30-day rolling average are based on telephone interviews with approximately 30,000 adults. The BLS report includes individuals that are 16 years and older and uses seasonal adjustments for comparison.
While the number of those directly unemployed has fallen from the peak of when this poll was began at 11% to 8.5% today the number of individuals that are underemployed has fairly stagnant and close to its peak of just over 20%. The recent decline in the percentage of unemployed does confirm the recent slight upticks in hiring seen in the recent employment reports. However, it also shows that a lot of that hiring may be occurring in areas that are part time or lower paying wage jobs as shown by the larger uptick in the "underemployed" status recently.
Regardless, the levels of unemployment and underemployment are high, and while recent improvements are encouraging, any economic shocks could send these numbers higher in a hurry. Notice the spikes in both reports early in 2011 as the economy was struggling through a very weak patch. With the "super committee" now effectively out of commission and automatic spending cuts looming that will subtract from GDP growth, international worries and a potential recession in the next year there are plenty of catalysts to send workers back to the unemployment line. This leads us to the confidence in the economy as a whole.
Economic Confidence
Gallup's economic confidence survey which is the combined responses to two questions: 1) rate the economic condition of the country today, and; 2) is the economic condition getting better or worse, really ties into consumers employment status and their ability to live. The chart compares the results of the economic confidence survey to the S&P 500. What is important to note is that economic confidence is closely tied to the performance of the S&P 500.
This was "The Bernank's" direct remarks when launching QE 2 in 2010 when we said that by targeting asset prices it would boost consumer confidence. He was correct. As the market rallied consumers expectations about the economy improved but unfortunately there ability to consume didn't improve along with it.
However, there is another way to look at this chart. The economic survey has tended to be a leading indicator of the economy as a whole and the markets. The last time that the survey had declined to these levels the economy was mired in a deep recession BUT the market was still near its highs. As we have discussed in recent missives on the economy, and as confirmed by the ECRI, we are likely in, or about to be in, a recession. If that analysis is correct then the economic survey may be confirming the same which means the stock market has some catching up to do.
It's All About The Consumer
While we watch the almost daily deluge of government reports that the media focuses on from one minute to the next it is important not to forget that it really all revolves around the consumer and primarily the small businesses that make up the bulk of hiring in the country. With real incomes declining, debt burdens stripping cash flows, home values falling, international turmoil, domestic political infighting and concerns about keeping a job if they have one, or finding one if they don't, there are not a lot of positive inputs to spur a strong consumer driven recovery. This lack of demand by the consumer is also why small businesses have no appetite for obtaining credit, increasing production or expansion of hiring beyond absolute necessity.
So, while "Rome burns" and our government "fiddles" while warring amongst itself over what policies to enact, where to cut spending or how to increase revenues it is important to remember that there are "real" people affected by the decisions made and actions taken. This is why I find the Gallup polls interesting - it is the voice of the "average American" ringing through and it is only a shame that our leaders aren't listening.
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the worse the numbers and dread the higher the funny magic retail sales climb, no inflation /sarc
Average Joe Sixpack does not think.
He just follows the herd into the abattoir.
If that comment doesn't get you 50+ arrows, then ZH readership quality is being diluted faster than GRPN or something.
"our leaders aren't listening"
Are you talking about the politicians? Because they just put on a show of power, really their strings are being pulled from much higher up. We all know its the 'Money Powers' who are running things, and things are going as they planned, thank you very much! If there is a way to rid the world of a few billion 'useless eaters' you can be sure these guys will already have the groundwork laid. Iran/Israel, any one? I hope I'm wrong, I really really hope so.
'Our leaders arent listening'...
No, its just that puppets do not have ears.
ZH readership quality took a big dive 43 weeks 2 days ago.
I see I've struck a nerve. Good. So... you've been feeling helpless for a year and 23 weeks or much longer?
Maybe just lighten up on the patronizing just a tad.
Why you and a few others(GRPN investors/members) took this as a personal attack is beyond me. As you can see most people here see 'average joe' marching to his own slaughter. Nobody is happy about it but it's so.
Don't attach your groupon shit to me. If it doesnt produce Gold or Silver(or Oil) I won't touch it. I will leave those shit stocks to you and Robo.
I had to look up abbatoir first, and then I gave him an upboat.
Isn't it a nice feeling when you finally meet your roots Sgt. Sausage?
I had to look up abbatoir first, and then I gave him an upboat.
I hate holier-than-thou statements. A pox on you and the high horse you rode in on.
I think the Average Joe, knows there are some serious problems in the economy. Its not that things don't look/work right, its because they are not.
All theses numbers are just used to keep you continually guessing, and to never have a clue
http://www.dailyjobcuts.com
.
Yes, he knows something is wrong but he has no life experience to triangulate what is going on, all he has is neo-classical economic hacks of all stripes blowing smoke up his ass.... He does not have a sufficiently well rounded education to figure out who is lying and why. He is getting frustrated and angry....
"Average Joe Sixpack does not think."
And yet, those who believe in 'democracy' (mythologised gang rape) would have you believe that the votes of the non-thinking schlubs ought to determine which political parasites get to live palaces at everyone's expense.
That aside, I am less inclined than you to reprise the ideas of that tawdry cunt Lippman (who, like Leo Strauss, believed that the masses were too stupid to be trusted - and thus NEEDED to be lied to for their own good).
That might seem at odds with my contrarianism - my trading style is specifically based on the idea that the bulk of the crowd makes systematic, exploitable errors during periods of entreme sentiment: that is, that the crwod is usually wrong.
On balance, it seems to me that most of the people I've ever met are fundamentally pleasant and wish no undeserved ill on others... until they get told who to hate: usually it's the State telling them who to hate, and especially so when the bodycount is significant.
One of the best expositions of this idea is "PsyWars" - see http://bit.ly/w1Q7da - which is similar to the (lower-key) "Manufacturing Consent".
Also, maybe we all need to cut Joe Six-pack some slack: the poor fucker spent twelve years being indoctrinated to pledge allegiance to a piece of cloth, and recite a socialist mantra like a Soviet-Style automaton. Then he gets chucked into a cubicle or a factory floor, and spends the rest of his life trying to make ends meet while being nickel-and-dimed by the system... by the time he gets home he's spent, and sits in front of the TV and gets hypnotised into believing all sorts of shit that his overlords want him to believe (we call that 'news').
His best bet is if he figures out that he can suckle at the tax-payers tit and become the BIG drain on humanity: the bureaucracy.
If he becomes a soldier, or a pig (of whatever-the-fuck agency), or a prison guard or a TSA agent... THEN he's a valid target for disdain unless and until he changes his ways. Those cunts are WAY worse than Joe Sixpack, because they're the ones whipping so Massa don't needs to git he hands doity. They're the kapos, the house niggers - the people who actively work so that people who despise them can live in palaces.
Y'all might think I've had some Damascene conversion - after all, I bang on all the time about how 68% of Yanks believe that angels and demons are active in their everyday lives (according to a Pew Poll in 2007: see http://bit.ly/tkNBWN )... and of course there's the whole thing that people believe in a genocidal Sky Wizard who granted some sister-fucking nomad the keys to the kingdom in exchange for cock-snippings, blood sprinkles and burnt offal.
But that's my point entirely: if you take a child of normal intelligence and fill their head full of shit, you wind up with a person of normal intelligence whose head is full of shit.
+1000
Damn fine rant....
GeoffryT,
I consider you a brother of mine after that spectacular, bare knuckled fury of truth you unleashed.
Hope & Change. Idiots brainwashed by TV and every channel and network are all the same. Stupid sheep who watch TV.
Speaking of idiots, you are making some noteworthy contributions... Haven't heard a well articulated thought come from your way yet, just a bunch of empty platitudes and rhetoric and some really misguided shit about energy...
Flakmeister... Freddie is just visiting this planet... from planet 'The Oil Drum'...
Naw... he escaped from the Yahoo! or Marketwatch boards....
Now now, don't be too hard on the kid. Flak's criticism was tough but could at least be taken constructively. Now your devolving to name calling will definitely not show him how things are done around here, while doing yourself the dishonor of lowering you to his level conversationally. How about we clean up our rethoric a little?
Fight Club is a tough place, fools of any stripe are not coddled....
If anything I was defending the Oil Drum....
Explain to me why every restaurant is literally packed wherever I go almost every day of the week. Granted I'm looking at Brooklyn and Manhattan but it's full of relatively young patrons spending a lot of money. Bah.
I bet it's on credit or on their student loans, same thing I guess.
It isn't true here in Arkansas.
I have actually noticed my grocery store is fuller.
For the past year, every time I've made a trip to Lowe's (in Texas) it's been damn near empty.
For the first time in memory, both Lowes & Home Depot are closing doors and reducing store count. New stores are coming that will have smaller footprints, fewer items. More emphasis on their web sites, too.
ArkAngie... Perhaps your grocery store is 'fuller' because more people are preparing meals at home?
...and the Lowes/Home Depot in my area are like ghost towns.
Because a) Manhattan and various other welfare state areas, bailed out and blessed by Paulson, The Bernank, Geithner, ObaMao & Daley, (having the all important /s financial industry subsidized by taxpayers in the rest of the nation thanks to The Bernank & Geithner), hasn't had its day of true reckoning yet, and b) even those who can't make it in that highly subsidized space still have their plastic fantastic and have to "fake it until they make it - or crash and burn, tapped out."
Don't worry, though. Basic arithmetic forecasts to all with their eyes and ears open, with a 100% successful track record, that the subsidization is closer to the end, one (less violent and messy) way or (more violent and messy) another.
Wall Street & K Street - the two true welfare, taxpayer subsidized clusters in Amerika.
-- Cousin Eddie
(Cousin Eddie, who used to make 200k+ a year as a mortgage broker in Las Vegas during the housing bubble, and who typically then ate at Craftsteak & Del Frisco, was recently spotted in a buffet line at Filthy Sam's Casino & Truck Stop in Reno, flouting a Hawaii print shirt, splurging on the $1.99 all you can eat jello buffet.)
Go to a restaurant where they accept only cash.
because your either not paying your mortgage or your living in mommy's basement... leads to enough spare change to go out and pretend all is well and forget your problems over a burger and beer.
RobotTrader , his family, and friends, living it up on his daily winning stock market picks!
18 yr olds being bombarded with credit card applications... One last market to tap out.
80% of the people are still working on average, with 20% under/unemployment, and 90% of the younger ones don't know how to cook?
No, 80% of 'the people' arent working, only 1 out of 5 'work' in the first place. You mean 80% of the workforce is working.
I don't know who upvoted that, but I should downvote you both. "only 1 out of 5 'work' in the first place."
I call shenanigans on that. [1]. That's only 20% of the population.
Let's get to a, y'know, actual source: the Bureau of Labor Statistics. BLS puts the current number at 58.4%[2] - call it three times your 20%.
I fully understand the nature of some "fudging" of data here and there, especially by FedGov[3], but to inflate the workforce numbers by 300%? I want some of what you're smoking.
[1] Actually, I call "bullshit".
[2] http://www.bls.gov/news.release/archives/empsit_11042011.pdf Table A1, "
Employment-population ratio"
[3] http://www.shadowstats.com/
Here's your downvote.
Well where we go lots of places are packed and just around the corner or down the block are 5 places that are closed.
Look around , you may or may not find the same.
There are spots where the "downturn" never really hit hard and other spots that were wiped out.
And of course picking one of the most densely populated areas in the US where most do not have a day's worth of food stored translates well to the rest of the world.
pods
If you walked into said restaurant you would notice what they are NOT eating and drinking. My wife and I notice a lot of shared meals and the city is always running 'restaurant weeks'. Restaurants are places to meet and chat because most people live in apartments that they are embarrassed of. Even 'full', restaurants suffer to an extent.
Go long "to go" boxes. I am seeing more of them. At the end of the meal, what hasn't been eaten is going home to be eaten later. Just watch when you go out to dinner.
It's definitely not what I'm seeing in Vegas. Restaurants are less crowded, stores are less crowded, casinos and shows are less crowded. Plus long-established restaurants, stores and businesses are still closing.
Vegas is doomed.
It is based on an economic model depending on people having money to lose, and is located far from its customer base - requiring gas or jet fuel to vitsit. Furthermore it's in the middle of a desert - in a place no sane humans would otherwise live. Eneregy and water will both be in shorter and shorter supply in the future - with fewer and fewer customers for the vices Las Vegas offers. The whales are going elsewhere - especially the Asians who are staying closer to home - while the small fish don't have any money to lose these days.
Margin squeese. Less places less places to go, if you have the money.
Dating is still occuring dispite the ecomomy. Some forces are stronger then others. Ask any phd, or teen. Since teens have all the answers and know everything.
Ps. I guess you got your explination.
Yeah, and Ph.Ds, too!
That's elementary, American women (generally speaking) can't cook. Hence the restaurants are always full, plus the 'food' served there has an addictive component.
Living in NYC I see this too, especially where I work. But then in my office the vast majority of people come from money -- there are people here in their 30s whose apartments are paid for by mommy and daddy. I guess they are immune from the day-to-day worries of the middle class.
I bet if one went to the real Brooklyn (not Park Slope, Brooklyn Heights, Williamsburg, etc.) one would see those having trouble with paying for groceries and all that.
I'm fairly certain that Versailles and all the other palaces of the little Lords and Ladies were full of merriment almost up until the moment they were all dragged off to the guillotines.
mmmmm NYC?
Wall Street banks generating more profit in the past 2 1/2 years than the previous 8 years combined probably has something to do with it.
Walk into Morton's Steakhouse in Cleveland. Nobody is there except for the bar at happy hour. I spend my days selling product in the middle of the country and the middle of the country is in deep shit.
people eat out because it is virtually impossible to buy food at a grocery store for less than you can buy it on a dollar menu at McDonald's. Seriously you can buy 10 double cheeseburgers for $10. Yeah buying your own fresh meat will probably taste better but at $5 a pound, 8 buns for $3.49, $5 for a pack of American cheese, $2.99 for a head of lettuce you'll be out $20 or more just to make the equivalent of that $10 worth of McD burgers.
NYC may have some action still but the restaurants in the burbs are slowing dramatically - lucky to get one turn in a night. The employed 20 somethings that were sharing apartments in Manhattan or Brooklyn are moving back home while the newer grads are still looking for employment - and never left home.
A good overall indicator is the liquor industry. Sales to bars and restaurants are down - store sales have increased. People are still drinking, but at home- they can't afford to go out.
Most young people (those under 40) are averse to cooking so they eat out.
because daddy doesn't want to see the little ones deprived of anything. and also because it doesn't matter if you don't pay your condo mortgage or credit card bills. try getting outside of one of the biggest metro areas on the planet. it's not the same. they are empty.
SHITTERS FULL
You rang?
I can no longer afford to be a consumer so I guess that just makes me a citizen.
Nope. Sorry to tell you. Citizens have rights. You are now just a person.
"Citizen" is the label of the self-enslaved who wants to equally enslave all others who desire freedom.
Actually citizens have privileges, people have rights.
pods
Aggh. That sounds correct. If so, and they have taken away so many of our rights, what is below people? What are we now?
People dont have names. Taxpayer's and citizens do.
I am a member of the people, i have no id, sign or mark.
As bbq said above, people are sovereign. We the people ordained the constitution. We the people made it the law. How? By our sovereign authority.
Most people have given up their rights in exchange for the privileges afforded in the 14th amendment. By doing so, you have waived your rights. Of course, this is without your knowledge.
They technically have not taken away your rights, you have waived them to be a part of the 14th amendment trust, ie became a citizen.
pods
edit: http://1215.org/
I think they erased about 1/3 of the Bill of Rights with the patriot act.
Well technically they have sort of adopted the organic constitution for citizens, but as revocable privileges. So yes, the Patriot act did take away those "rights" even though they were merely civil rights, which is code for a state granted privilege.
A right is something you exercise independent of anyone else, and rights are anything that the sovereign declares they are. The Bill of Rights was actually looked upon very badly when proposed, for good measure.
Read Federalist 84 and what Hamilton (yeah, that central bank Hamilton) said about the bill of rights. It shows why there was an objection to it, and it came true. Any listing of rights would certainly omit something, and that would be taken as it wasn't there, it wasn't a right. The constitution was framework of rules for the government, ordained by the people, to abide by. If it wasn't in there, they had no business being involved. The bill of rights blurred that and seemed to place certain constraints upon the people.
Fast forward to today and the constitution is merely a paper shield or permission slip. Never was meant to be that way.
I laugh when I hear people speak of getting a permit to exercise a right. If you have to ask permission, it ain't a right!
pods
Damn straight, pods.
And they tax our asses on the permits we have to obtain in order to exercise our so called 'rights,' to rub salt into the wound.
Serfdom. But don't despair, corporate personhood still has rights...even if you don't.
One can strive to work for a corporation and become [1/(total number of employees)]th of a 'person'.... it's something.
As a corporate peon there's only about 6 degrees of separation between you and a human. (worker -> tax payer -> consumer -> person -> citizen -> human being)
Yes Pods, thats why the USSC went out of its way to classify corporations as 'persons'. Only they have rights and special protections....citizens have no rights and only granted 'privileges' that is as long as youre a good slave and dont break any rules.
Well I think that the SC recognized that corps could be looked at legally the same way as a citizen. From what I have read, person is not the same as people, lawfully speaking. I think that might be up for debate, but the context where corps were given personhood is clearly not the same as people. As they were given the privilege by a construct below the people.
I absolutely agree that citizens have been duped into thinking they have rights. Technically they do, but they waive them shortly after entering a court.
pods
Last I checked I don't have Limited Liability which means corporations are "more free" than me.
1. You have the right to be taxed!
2. You have the right to be probed and prodded when you travel by air
3. You have the right to being nickeled and Dimed with hiden fees
4. You have the right to choose between elected criminals (Criminal A or Criminal B - You choose!) - Much like the in the movie ghosts busters when the team had a choice of the form of there destroyer.
wrong again, corporations are persons.
you are in fact enlightened.
Sovereign citizenship.
http://www.civil-liberties.com/pages/art1.html
"When men entered into a State they yielded a part of their absolute rights, or natural liberty, for political or civil liberty, which is no other than natural liberty restrained by human laws, so far as is necessary and expedient for the general advantage of the public. The rights of enjoying and defending life and liberty, of acquiring and protecting reputation and property, - and, in general, of attaining objects suitable to their condition, without injury to another, are the rights of a citizen; and all men by nature have them"
"These are the rights inherent in Sovereign Citizenship. So long as we remained Citizens, they couldn't be taken away from us. So the key was to take our Citizenship away from us."
The average american needs to be told marketed to cuz he doesn't know what's good for him the corporations do
I recognize snark when I see it, the problem is, it's also true.
Please, somebody, tell me what I want.
Green Apple Jellybeans.
The average joe needs to be told marketed to cuz he doesn't know what's good for him the corporations do
http://rt.com/news/israel-attack-iran-report-981/
Its ok jobs will be created soon...see above link...
The average Joe doesn't think, that is why this charade has gone on so long.
pods
What people think? Look at the mortgage purchase applications and continuing unemployment claims. The government has stabilized the patient IN A COMA.
Republican Presidential Candidates And The Housing / Mortgage Market Miralce Fix
https://confoundedinterest.wordpress.com
Look at the employment claims and Case-Shiller numbers. We are stable, but so are many coma patients. Is this the NEW NORMAL?
No wonder Republcans don't propose a solution. There IS NO GOVERNMENT SOLUTION to the probkem.
Obama has to stop thinking like an Italian or Greek.
Obamalini?
We are in a recession. We have been in a recession.
Government spending and the extend and pretend of the banksters does not constitute a recovery. Especially since the bulk of this goes directly to the 1%'ers.
Recession? What recession? You must be joking?
Try - DEPRESSION! It started four years ago. Things are not better, they are getting worse!
Wake up and smell the coffee! Thats if you can afford a cup!
The 'average' American is in the middle of the 'traditional bell curve' and are that stupid; what's scary is the 50% that are dumber than that!
And they all work in the FIRE sector, or the MSM
Someone doesn't really understand a Gaussian Distribution. Half that curve is on the *other* side, too.
What's really scary is that 50% are *smarter* than that ... and a good portion of those are taking advantage of your 50% in every way they can. That's the truly frightening shit in that distribution.
Yes, but not much smarter; how many near the top of that curve??? It's the ones on the step down curve that are a smaller percentage.
http://opass.files.wordpress.com/2007/06/iq100b.jpg
I understand IQ doesn't always imply 'book smarts.'
I personally believe intelligence to be the capacity to learn and use of critical thinking skills.
response to dear ganja jane - i paraphrase something i saw here a while back , and my eyes teared up from it laughing.
'by definition - 50 % of the population is below average intelligence. so all you need is some guy with one idea (change, hope?) that they can grasp, and one guy having a bad day - and you're elected. that's our government.'
Average joe has cash, buys stuff. No cash but credit still buys stuff, but not as happy. No cash or credit and getting hungry joe is getting a little pissed. Kicks the dog, gets drunk and blames it anyone that MSM says too and many of those who had nothing to do with it.
Congresscritters work on the average joe level. IT makes it easy for them to fist fuck us actual thinkers.