Posts Tagged ‘Conference Board’

Economic Measurements of U.S. Economy Remain Grim

September 28th, 2010 Comments off

The  Conference Board released its monthly report on consumer confidence. It declined by nearly 5 points on a scale of 100  in only one month. In August the Conference Board rated consumer confidence at 53.2; its most recent indicator is at 48.5. Despite hype by Obama administration officials that the American economy is “headed in the right direction,” the consumers are not buying it. And they are not buying much of anything else, as weak consumer demand continues to undermine the deficit-popping government stimulus program, which is now ending.

With artificial life-support by the government of the wounded U.S. economy in its terminal phase, it is likely that the American housing market will continue its role of deconstructing what is left of the economy and consumer confidence. The latest Case-Shiller home price index reveals continued contraction. This is not a good omen, as government programs for propping up the residential real-estate market are winding down.

Consumer Confidence in the U.S. Continues to Dip

October 28th, 2009 Comments off

After declining in September, consumer confidence in the United States continued to erode in October, according to the Conference Board. This business organization compiles the Consumer Confidence Index, which declined from 53.4 in September to a sobering 47.4 in September. This dip surprised analysts, who expected to see stability or even a modest increase in consumer confidence.

It really should not have been a surprise to the financial wizards. A disastrous and still increasing rate of unemployment, compounded by record levels of home foreclosures, hardly creates an environment conducive to consumer optimism.

The economic implications of eroding consumer confidence are clear. Prior to the onset of the global economic crisis, the American consumer generated more than 70% of U.S. GDP. Even with massive deficit-funded stimulus programs, the retreat of the American consumer has created a collapse in economic demand that  simply cannot be made up. If there is a recovery, it clearly won’t be led by the consumer.

But without the releveraging of the American consumer, where else can the slack be made up? The bad news is that Ben Bernanke actually has an answer for that economic predicament. It’s called money printing.


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