Consumer Confidence Plummets to 46 after a 3 Month Upturn

I have roughly the same faith in the economists who had predicted that The Conference Board’s Consumer Confidence Index would fall slightly from 56.5 to 55.0 as I do in the American consumer’s ability to gauge the direction the economy is headed.

While the US consumer drives the economy I would sooner drive a Toyota then allow them to essentially determine the course of this recovery with fickleness. Remember the US consumer is also the reason for the Oreo Pizza and Jimmy Dean’s Microwavable Chocolate Chip Pancake Wrapped Breakfast Sausages on A Stick.

With nearly 70% of all economic activity dependent on the spending habits of the public this hotly awaited report shows a real danger of a stalling consumer based recovery. But Why? To look at the headlines of the last few days you would expect a very modest drop. Macy’s and Sears beat outlooks in their Q4 reports, Target’s profits were up 54% on not just lower margins but increased sales, Office Depot has reduced its losses and Home Depot is guardedly optimistic that it is returning to profitability. This is not nothing, this is something. Or so it looked before today’s report.

Not unlike the months following the recession of 1981-1982 following a three month rise in confidence we are once again treated to a violent swing, one which ultimately leveled off in 82’. With employment and housing numbers showing improvement, and economists predicting rosier months ahead this nose dive in confidence is truly baffling unless……

The 5000 families surveyed each month to measure confidence had to dig themselves out from record snowfalls. Nobody likes an unexpected blast from nature that shuts down cities not accustomed to snow. Alternatively, there are undoubtedly a fair number of those surveyed who lost their Super Bowl bets when New Orleans shocked Indianapolis and still believe that onside kick to begin a half is dirty pool.

One last theory, people are just tired of seeing a political party which controls both The Senate and The House in addition to the White House bickering like children, while the most watched cable news network predicts the ruin of all things good for people on the other end of the political spectrum through a barrage of 24 hour a day vitriol. Who can blame them really?

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