Tuesday morning, the Conference Board reported that confidence among U.S. consumers "unexpectedly" fell for a second month in October, according to Bloomberg. For those who live in the real world (e.g., Financial Armageddon readers), the number shouldn't have been much of a surprise.
Regardless, what I found interesting is the continuing wide disparity between consumers' upbeat views on the future and their bleak assessment of current conditions. I wonder how long will it be before that gap contracts -- most likely as a result of lofty hopes being dashed -- and a more broad-based panic sets in?
And just to show that Tuesday's number wasn't just an outlier, Business Insider's The Money Game blog highlighted some less than optimistic perspectives on the economy from another survey of Americans in "Gallup: Consumers And Businesses In All-Around Retreat":
A little more color on Tuesday morning's punk consumer confidence data, courtesy of Gallup:
Economic Confidence worsened slightly last week, as Gallup's Economic Confidence Index fell to -29 — down nine percentage points from where it was just a month ago. The percentages of Americans describing the economy as "getting better" (37%) and as "getting worse" (58%) are not much different from those of the prior week, but are considerably worse than those of the same week last month. "Poor" ratings of the economy are up five points from a month ago to 48%, while "excellent"/"good" ratings are at 11% (vs. 13% a month ago). The August and September gains in economic confidence seem to have dissipated in October.
Job Creation also lost ground last week, as Gallup's Job Creation Index fell back to +1 — down three points from the prior week's 2009 high. The percentage of employees saying their companies are hiring fell back to 24% — down slightly from 26% the prior week and 27% a month ago. The percentage of workers saying their companies are letting people go was essentially unchanged at 23% from 22% the prior week and 24% a month ago. Right now, layoffs are four points worse than they were during the height of the financial crisis a year ago, while hiring is down six points.
Consumer Spending fell back to its new normal last week, as self-reported daily spending in stores, restaurants, gas stations, and online averaged $61 — down $15 from the prior week and essentially the same as a month ago. It appears the "paycheck effect" combined with likely Halloween-related spending to create a temporary spending surge. Overall, the current consumer spending trend continues to disappoint: it is down 34% from the $92 average of the same week in 2008, even though last year's comparable reflects conditions that followed the onset of last year's financial crisis.