Not Very Confident Consumers

The U.S. Government should probably just keep the printing presses running when it's done with the current stimulus program. If recent surveys of the mood of the consumer are any indication, it's going to take a lot more than $600 per person to turn things around.

The Conference Board posted the latest results from their monthly survey of consumer confidence and it ain't a pretty picture. As you might imagine from looking at this chart from Econoday, if you remove the energy price increases from the retail sales data, things would look even worse.

Not known to be alarmist (in fact generally wearing rosier glasses than most) the commentary at Econoday provides the alarming details:

The Conference Board's index fell nearly 4 points in April to 62.3 -- the worst reading since the early 90s...

The report's component for current job conditions also points to trouble next week, as more say jobs are hard to get (27.9 percent April vs. 24.5 percent March) and fewer say jobs are plentiful (16.6 percent vs. 19.2 percent). The jobs question for six months shows an incredibly low 8 percent seeing more jobs against an incredibly high 32.8 percent seeing fewer jobs.

But the worst news in the report is a true spike in inflation expectations, up 7 tenths in the month alone to 6.8 percent -- a record level matched only after Hurricane Katrina in 2005. CPI data may not being showing much pressure but consumers are saying clearly that inflation is on the rise. The results even include a 30-year low for vacation plans, no doubt reflecting the weak dollar, which raises the cost of foreign travel, and high gas prices which of course raise the cost domestic travel.

That rapid deterioration in the outlook for jobs is pretty alarming, but not nearly as alarming as the inflation expectations number - 6.8%!

Actually, what might be most alarming in this report is the following:

CPI data may not being showing much pressure but consumers are saying clearly that inflation is on the rise.

The jig may finally be up for the much maligned U.S. inflation statistics.