Earlier this week, I noted that the Conference Board's consumer confidence measure for February fell to its lowest level in about 27 years. Today, another source indicates that consumers were feeling worse this month. Thomson Reuters/University of Michigan's Surveys of Consumers reports that its index declined in February as well, to 73.6 from 74.4 in January. While this appears a less extreme drop than the Confidence Board's measure, it's still pretty discouraging news.
First, just how bad this index value is remains unclear -- Reuters/Michigan provides little data to nonsubscribers; and sadly, I don't have a subscription. So I can't talk about it in much context. But their index's decline does confirm that the Conference Board's drop isn't an outlandish finding. This reinforces the news that consumers are more pessimistic.
And greater detail also shows bad news for economic expectations. Reuters says:
The survey's barometer of consumer expectations weakened to 68.4 in February from 70.1 in January.
Compare that to what the Conference Board said about expectations:
The Expectations Index declined to 63.8 from 77.3 last month.
Their indices are likely on different scales, but again, their results are in the same direction. Americans are not only pessimistic about the present, but particularly discouraged with the economy's direction.
The Reuters/U Michigan survey explains what has consumers so down:
"Consumers have been getting more impatient with the slow progress of the stimulus program, and confidence in the Obama administration's economic policies has begun to wane," Richard Curtin, director of the surveys, said in a statement.
Americans aren't pleased with their lawmakers. Anyone who follows U.S. politics probably finds this statement utterly unsurprising. But consumers' poor view of politics is also shaping their view of economic health and prospects. Since it's unlikely that Washington will undergo any meaningful change in the near-term, this revelation probably doesn't bode well for consumer sentiment. So let's hope something else can overshadow the trouble in politics to create some optimism.
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