An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
For the first time since 2007, a majority of Americans think things are going well in the nation, a new CNN/ORC International poll found.
It's a slim majority — just 52 percent of Americans said things are going well, while 48 percent said things are going badly — but it's the most positive appraisal of the state of the nation that the poll has found since January of 2007.…
No so much for the economy though.
Economic sentiments have improved over the past year as well. Though just one-third of Americans believe the nation's economy is starting to recover, that marks an 8-point increase from a year ago, when 24 percent said the same.
A plurality, 41 percent, say the economy has stabilized, a 5-point improvement from November of 2013.
And just 26 percent of Americans say the country's economic conditions are getting worse, a decline from the 39 percent who said so in 2013.
The Conference Board Consumer Confidence Index®, which had rebounded in October, declined in November. The Index now stands at 88.7 (1985=100), down from 94.1 in October. The Present Situation Index declined from 94.4 to 91.3, while the Expectations Index decreased sharply to 87.0 from 93.8 in October.
Lackluster Consumer Confidence report for March out today from the Conference Board. Story at MarketWatch here.
The consumer confidence index slumped to a reading of 59.7 in March from 68.0 in February.
That’s well below the 66.5 expected in a MarketWatch-compiled consensus.
February’s reading also was downwardly revised from an initial 69.7 report.
Most of the drop came from a decline in the expectations index, which slumped to 60.9 from 72.4, though the present situation index also fell, to 57.9 from 61.4.
The index was the second large drop in three months. That said, retail sales growth has been solid the first two months of the year, posting monthly gains of 0.2% in January and 1.1% in February.
From the Conference Board statement:
“Consumer Confidence fell sharply in March, following February’s uptick. This month’s retreat was driven primarily by a sharp decline in expectations, although consumers were also more pessimistic in their assessment of current conditions. The loss of confidence, particularly expectations, mirrors the losses experienced this past December and January. The recent sequester has created uncertainty regarding the economic outlook and as a result, consumers are less confident.”
We can examine these confidence readings over the recent past months that are discussed in the article in light of the fiscal data over this same time period in the table below.
TGA Net Withdrawals (Trailing 6 months)
Month
Total_Withdrawals_TGA
Pub_Debt_Redemption
Net_Withdrawals_TGA
oct
933
589
344
nov
1035
643
392
dec
947
651
296
jan
969
643
326
feb
992
549
443
mar
(25th)
713
402
311
We can see that the extremely large Net Withdrawals from the TGA in February align perfectly with the anomalous higher confidence readings in this same month. And a precipitous drop-off in December followed up by a generally lackluster January align well with the lower confidence numbers in those months also.
Just a small window of time presented here granted, but this data seems to suggest that confidence increases as the government sector injects higher amounts of $NFA into the non-government so that we can make payments on our liabilities and perhaps even save a little ... hmmmmmm, who would have thought?
Americans are making progress in working down their heavy debt burden, but are struggling to break out of another funk holding back the economy: their deep pessimism.
Some economists point to a big drop in household debt as a sign that American consumers - once considered the driving force of the world economy - are primed to return to more spendthrift ways.
But standing in the way of a stronger recovery, and possibly President Barack Obama's re-election as well, are unprecedented levels of concern that better days may not lie ahead.
Research suggests that economic growth will suffer from a sinking feeling among consumers that their incomes will continue to lose ground to inflation. Even though households are digging themselves out of debt, the painful 2007-2009 recession could leave a lasting scar on their willingness to spend.
"Given people's expectations, the outlook going forward does not suggest much upside for consumption," said Jeff Greenberg, an economist at Nomura in New York. "A lot of people will be radically different consumers."
Polls show record levels of pessimism about future income despite slow improvements in the economy. Indeed, Gallup surveys have found Americans are even gloomier about their finances now than they were during the recession's darkest days.
