Why So Sad? Consumer Confidence Is Down

Hey consumers? What’s the matter? You’re losing confidence! That’s not good! The Confidence Board reported yesterday that the consumer confidence index is down to the lowest level in almost a year. The index measures how consumers feel about things like the economy and employment. In addition, new home sales dropped everywhere but the sexy, sexy Midwest (where they are up 30.8%.)
From the NYT:

The Conference Board, based in New York, said that the consumer confidence index fell almost five points, to 103.9, from a revised 108.5 in May, reaching the lowest level since August 2006, when the reading was 100.2. Analysts had expected a reading of 106.

Lynn Franco, director of the board’s Consumer Research Center, said in a statement, “A perceived softening in present-day business and employment conditions are the major reasons behind this month’s pullback in confidence.”

Another Conference Board gauge, called the present situation, which measures how shoppers feel about economic conditions, fell to 127.9, from 136.1 in May.

Still another, the expectations index, measuring shoppers’ outlook for the next six months, declined to 87.9, from 90.1.

Economists watch consumer confidence data because such retail spending accounts for a major share of United States economic activity. Retailers have had sluggish sales because of the weaker housing market and the significant rise in gasoline prices.

So, consumers, are you feeling a little shaky? Do you need a hug?

Consumer Confidence Falls; So Do Sales of New Homes [NYT]


Edit Your Comment

  1. etinterrapax says:

    Well, let’s see. Chinese poison train, utilities doubled in the last two years, and here in sunny Massachusetts, we’re about to be forced to buy health insurance to be in compliance with a state law that’s endorsed by people who already have health insurance and don’t have to pay for it. And because we’re wealthy, har, by missing the cutoff for subsidized rates by $500/annum, it’s going to cost us at least $750/month for a shit plan! So you’ll forgive me if I don’t feel like going out and buying a flatscreen TV. Or, you know, groceries. ::fume::

  2. Moosehawk says:

    Damn right, go Midwest. We sell homes better than all ya’ll.

    But seriously, with the Pet Food crisis (both times), toy recalls, gas prices and like Etin said, the chinese poison train, how could you not be a little scared of the economy?

    And for the record Meg, yes, I could use a hug.

  3. Meg Marco says:

    @Moosehawk: ::hug::

  4. Starfury says:

    People are finally realizing they have to pay off their debts and are busy spending money on that instead of buying new stuff.

    Personally I’m not too worried about my job but we are spending less on stuff/eating out because our gas costs have gone from $1.50/gal to $3.50/gal and that extra $$ has to come from somewhere.

  5. thunderstruck says:

    To better understand the Midwest housing market, some dedicated analysis is in order.

    Base on the median incomes around here, one must figure we finally achieved an equity position in the trailers and are trading up.

    Does Ameren give hugs?

  6. frogpelt says:

    People were just saving for the iPhone.

  7. whydidnt says:

    These things are always cyclical. Based on the incredible run up the housing market had in the early part of this decade it was inevitable that it would slow down and there would be some correction. I’m not worried about my job, but like everyone else, you have to try and live within your means and if gas prices go up, that means less disposable income for other “stuff.”

    With the slow down in the housing market, there is also less “equity” for people to pull from their existing houses for things like home improvements, and that has a ripple affect on the economy too. So, I have to say I’m not particularly confident that things will get better in the short term, but very confident that in the long term we’ll be just fine.

  8. andrewsmash says:

    Housing prices are so artificially inflated thanks to speculation that it is no longer feasible for people in the bottom 30% to buy a quality house that can actually gain in value. All they can do is buy into those lousy developed communities that look like they will last about ten years.

  9. DashTheHand says:

    Lets see…for myself the following have all increased in price in the past few years: Gas, utilities/electricity, cable/internet, cell phones, rent, insurance.

    Couple that with meager cost of living pay increases, poor job market, chinese death train that doesn’t give a shit, CONSTANT UNNECESSARY WAR, horrible politicians that don’t give a shit about your rights as long as they get their corporate payouts, the government telling us which video games and music we should and shouldn’t be allowed to watch or listen to, pointless format war, and about a thousand other differing jabs.

    All one has to do is read this site to show how much even NA corporations don’t give a crap about anything but making a profit and raping their own consumers of their rights.

    North American economy has turned to shit for middle and lower class.

  10. G-Dog says:

    Funny how similar 2007 and 1976 are.

    From the movie, ‘Network’

    I don’t have to tell you things are bad. Everybody knows things are bad. It’s a depression. Everybody’s out of work or scared of losing their job. The dollar buys a nickel’s work, banks are going bust, shopkeepers keep a gun under the counter. Punks are running wild in the street and there’s nobody anywhere who seems to know what to do, and there’s no end to it. We know the air is unfit to breathe and our food is unfit to eat, and we sit watching our TV’s while some local newscaster tells us that today we had fifteen homicides and sixty-three violent crimes, as if that’s the way it’s supposed to be. We know things are bad – worse than bad. They’re crazy. It’s like everything everywhere is going crazy, so we don’t go out anymore. We sit in the house, and slowly the world we are living in is getting smaller, and all we say is, ‘Please, at least leave us alone in our living rooms. Let me have my toaster and my TV and my steel-belted radials and I won’t say anything. Just leave us alone.

    Well, I’m not gonna leave you alone. I want you to get mad! I don’t want you to protest. I don’t want you to riot – I don’t want you to write to your congressman because I wouldn’t know what to tell you to write. I don’t know what to do about the depression and the inflation and the Russians and the crime in the street. All I know is that first you’ve got to get mad.

    You’ve got to say, ‘I’m a HUMAN BEING, Goddamnit! My life has VALUE!’ So I want you to get up now. I want all of you to get up out of your chairs. I want you to get up right now and go to the window. Open it, and stick your head out, and yell,

    I’M AS MAD AS HELL, AND I’M NOT GOING TO TAKE THIS ANYMORE!’ I want you to get up right now, sit up, go to your windows, open them and stick your head out and yell – ‘I’m as mad as hell and I’m not going to take this anymore!’ Things have got to change. But first, you’ve gotta get mad!… You’ve got to say, ‘I’m as mad as hell, and I’m not going to take this anymore!’ Then we’ll figure out what to do about the depression and the inflation and the oil crisis. But first get up out of your chairs, open the window, stick your head out, and yell, and say it:

  11. nequam says:

    @etinterrapax: “it’s going to cost us at least $750/month for a shit plan!”

    You’re complaining about being forced to buy insurance, but you’re also complaining about a particular plan being expensive and shitty? I’d have to imagine a shit plan is better than no plan. And it sounds like you wouldn’t have a plan if the law didn’t require it. Hmmm …. who exactly do you want to pay when you get sick? Oh right, you want a subsidized plan — meaning everybody else helps pay for you?

    The subsidies under the MA plan, it should be pointed out, apply to individuals and families at or below 300% of the federal poverty level. Is it unreasonable to require a person who earns 3x the poverty level to pay their way on healthcare? I don’t think so.

  12. azntg says:

    Everyone who posted in this blog above me hit it right in the nose. One further thing I might add, which is not necessarily related to the Chinese poison train is the declining quality of goods and services that we buy too. So, don’t act surprised!

  13. Art Vandelay says:

    What’s there to be confident about?

    The job market sucks, even for recent college grads. Employees in the middle and lower class are treated worse and payed less every year. The dollar is losing value. Our ‘representative’ government at all levels couldn’t give two shits about us. The producer of countless US goods, China, cares little for product safety/standards. Wealth is once again consolidating at the top of American society, and they drive the national agenda more efficiently than ever before.

    The only think to be confident about is technology getting better, but if you have no money to purchase it, what’s the point?

  14. etinterrapax says:

    @nequam: A shit plan will still bankrupt us if we’re forced to use it, and the premiums alone will cost us our entire budget margin and then some. We don’t expect anyone to pay for our medical bills. But we do resent being forced to pay ten times in a year what we are wont to use in services because we exceed the guideline amount by a very slim margin–1% for our household size. By paying cash, we already pay–indirectly–into the uncompensated care pool, which means that we contribute to everyone else’s care as it is, and we pay our own expenses at a higher rate than insurance companies pay. I don’t think that it’s outrageous to want health insurance expenses in line with our actual health risk. But because uninsureds are seen as a high-risk group, the premiums are priced accordingly.

    I think that the perception of most people in Massachusetts–the 90% who have largely employer-sponsored health insurance– is that this plan is helping people, and I’m sure that it is helping some people. But it’s doing us no favors by compelling us to participate at a cost that’s out of our reach and penalizing us if we don’t.

  15. Brazell says:

    @G-Dog: G-Dog… how alike is 1976 and 2007 because……. I’m kinda wondering. Nice movie quotes, of course.

  16. Brazell says:

    @etinterrapax: Nah, I think that a good amount of people — definitely more than 10% are against this plan. I have employer-sponsored health insurrance, but I’m against criminalizing people who don’t have health insurrance… I just think it’s ridiculous that if you don’t have health insurrance, you become a criminal..

    People west of 128 share your sentiments, or at least, there’s a lot more people who do than those in Boston. But, per usual, Boston decides for the rest of us.

  17. du2vye says:

    IF you were discplined, IF you started young enough, it’s quite possible for someone to self insure themselves for much less than paying a company to do it. This is obviously not a plan for everyone – but it’s a choice that mandatory insurance doesn’t allow.

    Chances are if someone faced a catostrophic health problem, their insurance wouldn’t cover it anyway – but they don’t know it yet.

    It seems ridiculous to me, to mandate the same thing that is responsible for the failure of healthcare in this country, i.e. make it worse (and wealthier).

  18. nequam says:

    @du2vye: “Chances are if someone faced a catostrophic health problem, their insurance wouldn’t cover it anyway – but they don’t know it yet.”

    Seems doubtful. And routine (and covered) medical problems can exceed the cost of premium+deductible real quick. I think the number of people who have planned to self-insure as you suggest is so minimal as to be irrelevant to the discussion of mandatory coverage. The majority of people who balk at obtaining coverage are gambling that they will remain healthy. It’s a naive and shortsighted view. Meanwhile, other people are paying to hedge the bets of the uninsured.

    The law in Mass. (which does not criminalize the failure to have insurance, by the way) is an evolving thing and an annual review of affordability is written into the program. So that people may draw some comparison to their own situations: A family of 3 earning $50,000/year qualifies for the subsidized program. The suggestion in the early comments that a family making slightly more than that (exceeding the cutoff by 1% or $500) cannot afford health premiums and groceries is a little tough to swallow.