A fairly decent gauge of the economy is consumer confidence, which took a nosedive in May. It’s now at the lowest level in nearly two years, following three consecutive months of increased consumer debt and simultaneous gains.
The reason some prefer to get the consumer confidence data is that it can give us a feel for the average American’s situation – whether they are consuming and buying or not. Either way, in the current situation, it isn’t disposable income most consumers have spent in the past three months, but debt. Credit card debt is a record high while confidence is eroding. The Conference Board’s Consumer Confidence Index tumbled to 121.5 in June, dropping from a downwardly revised reading of 131.3 in May.
June’s results missed consensus expectations for a reading of 131.0, according to Bloomberg-compiled data, and marked the lowest level in nearly two years. Indices tracking consumers’ assessments of current and future business conditions also sharply declined in June, the Conference Board reported. The Present Situations Index fell 8.1 points to 162.6 in June, while the Expectations Index decreased 10.9 points to 94.1.
U.S. Consumer Debt Surpasses Financial Crisis Levels
According to the Conference Board, Americans’ confidence in consumerism fell because of the geopolitical ramifications of the trade war. However, many are simply “tapped out” and can’t take on more debt or spend more money even if they wanted to. But the tension between the United States and China with regards to trade is shouldering the blame, and it should get some. But there were deeper problems with the economy before the trade war started.
“The decrease in the Present Situation Index was driven by a less favorable assessment of business and labor market conditions,” Lynn Franco, senior director of economic indicators at the Conference Board, said in a statement. “The escalation in trade and tariff tensions earlier this month appears to have shaken consumers’ confidence.” Franco added: “Although the Index remains at a high level, continued uncertainty could result in further volatility in the Index and, at some point, could even begin to diminish consumers’ confidence in the expansion.”
The Conference Board also said fewer consumers expect conditions to improve in the coming months too, according to a report by Yahoo. The percentage of consumers expecting business conditions to improve six months from now decreased by 3.3 percentage points in June to 18.1%. Those expecting business conditions to worsen rose 4.3 percentage points to 13.1%. “It is a disappointing outcome given that expectations ought to have received a boost from the drop back in gasoline prices and renewed surge in the equity market back to record highs,” Michael Pearce, senior U.S. economist for Capital Economics, wrote in a note.
Some say this drop in consumer confidence could be only temporary and spurred by the threats of a trade war with Mexico. “We’re guessing that the Mexico tariff fiasco, which also triggered steep drops in business surveys conducted while the tariff threat was live, is responsible,” Ian Shepherdson, chief economist for Pantheon Macroeconomics, explained in a note. “If we’re right, the confidence index will rebound strongly in July, unless the Osaka [G20] summit is a disaster and the president imposes tariffs on imported Chinese consumer goods.”
“For now, note that the index remains very high by historical standards even after this decline, and it is no threat to our view that consumers’ spending will continue to rise at a solid pace,” he said.
Went to Wally World yesterday. Lots of “Prepping items” missing from the shelves. (Generic Tylenol, canned goods, dehydrated hash brown spuds) . Seeing that we are on a brink of war and being flooded by Invaders from south of the border, no wonder we Consumers are concerned.
Prep, prep, and prep some more!
SW,
We also use the GV brand of Instant mash potatoes ($1.24 per small box) and the Hungry Jack dehydrated hash browns in the small milk carton. ($1.14 per carton) Noticed that they don’t keep many on the shelve anymore, seems to be out when looking for them.
I have been storing more of these in mylar and 02 eaters. Figure that they should be good for ~ 10/15 years with that.
Heck we’ve eaten them 2 years past the best by date, and that was just sitting on the shelve in the pantry. Also the au gratin type of potato boxes have gone 5 years on the pantry shelve with no issues.
Y’all enjoy the day. 🙂
SW,
I’m over 60 years old and for my entire life
“we are on a brink of war and being flooded by Invaders from south of the border”
has been true.
Back in the day, Spanish was taught in every grade school
daily( 5th and 6th grades for me).
Prior to joining the military as a Vietnam era soldier,
I lived across the river from Compton, CA in the city of
Paramount, which was at least 50% illegals. English was a second language there. I had to speak Spanish at work,
as many of our customers didn’t speak English. My Argentine co-worker constantly complained about my “gutter” Spanish.
This was over 45 years ago in California!
Nothing has changed, other than the smart white people have left the state.
Same sh it different day.
War and invasion is a fact of life in America, it always has been and probably always will be.
True dat, served (Air Force) during the same war also, pushing 70 years old. Seems like we are getting closer to a big war soon, Iran will not be contained and seems to want to poke “The Bear” until we strike back.
I know that you saw L.A. go to hell, same here for my childhood home of South Florida. Yankee/Democrats and drugs.
“gutter” Spanish (aka Mexican).
Some speak, too formally, in order to gauge your understanding of Spanish.
If you don’t understand Spanish, they speak Mexican.
Same difference, between British English and Ebonics.
“gutter” Spanish (aka Mexican).
Some speak, too formally, in order to gauge your understanding of Spanish.
If you don’t understand Spanish, they speak Mexican.
Same difference, between British English and Ebonics.
CW,
Very well stated and accurate!
I could at one time speak very proper
conversational Spanish, but spoke Mexican
conversationally as a necessity.
I also butchered my Mandarin
Chinese.
CA used to have a very good educational system.
I was conversational in two languages other than American
English before age 14.
New article:
https://antoniusaquinas.com/2019/06/26/is-bitcoin-demonic/
(They seem to be consuming their shorts. Childish giggling or prudish complaining… Since you got my attention, then…)
If debt is the same as consumer confidence, I have never once been confident, after the bike I put on layaway as a kid. Never once.
I despise being kept on retainer for anything. What can be a worse inconvenience than slavery.
h ttps://www.openbible.info/topics/neither_a_borrower_or_a_lender_be
…and it is no threat to our view that consumers’ spending will continue to rise at a solid pace,” he said.
Hahahaha… shows how far out of touch he is.
Shopping!!!
Pick up a three or four year supply of feminine pads (organic without perfumes) and regular.
The organic ones for bandages.
Get those other things that the girls use, tampons.
It’s getting bloody hysterical lately.
.