Wednesday, October 26, 2011

The collapse of consumer confidence continues

- by New Deal democrat

Yesterday the Conference Board reported the lowest level of consumer confidence since March 2009.

This mirrors what I have been seeing in the daily Gallup consumer sentiment poll. Here is that poll since January 2008 (confidence is the dark green line):

Note the sharp loss of confidence at the time of the autumn 2008 financial collapse, and the even more sudden increase in early 2009. Specifically, sentiment sprang off its bottom at the same time as the stock market did, in the first week of March 2009 (just after the passage of Obama's stimulus package), rising sharply into May 2009. Sentiment stayed roughly even until the July debt debacle, when it collapsed right back down to its 2008 lows. Since that time it has bounced a little off the bottom, but is nowhere near to its pre-July levels.

This is an anomalous finding, seemingly a far more profound loss than the recent raw economic data justifies. Indeed, it appears to represent a Loss of Hope in the current political and economic status quo. If there is any silver lining, it is that this loss may be what finally galvanized the collective action of the Occupy Wall Street movement, which by the way I thoroughly support.