US Consumer Hopium Drops To February 2009 Levels

Someone forgot to tell the US Consumer that "Europe is fixed" and that "nobody has heard of Die Welt" according to Jim Cramer, who incidentally said back in May 2008 "how anyone can think housing will get worse from here is beyond me." Because according to the only non-biased and hence non-market moving consumer confidence poll, that of Bloomberg, October Economic Expectations dropped to -45 after -34. Not much to explain here: this was the lowest print since February 2009. As Bloomberg economist Brusuelas says, "Consumer confidence may be better predictor of direction of economy than spending."

Other findings in the weekly poll:

  • Weekly Bloomberg Comfort Index -48.4 for week of Oct. 16 vs -50.8 prior week; two-month high
  • Sentiment among highest earners ($100K+) -11.1 vs prior -9.2
  • Public “now expects economic conditions to deteriorate regardless of the recent increase in economic activity,” says Bloomberg economist Joseph Brusuelas
  • Seeing “consumer conundrum” where confidence remains relatively bleak despite increase in overall consumption
  • May tap savings, lines of credit to replace worn-out durables, then revert back to behavior consistent paring down

But, the consumer is deleveraging we are told. After all, some squiggly MMT line charts suggest that when the government is issuing $1.5 trillion in bonds each year, consumers must be deleveraging. They MUST.... Or, are those textbook descriptions of "reality" just a little off?