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News Link • Economy - Economics USA

Consumers Are Confident Of Recession

And that my friends is the nail in the economic "recovery." August consumer sentiment was just reported at 54.9 from 63.7 in July. This is the lowest level since May 1980. The chart below shows the correlation with sentiment and the consumer component of GDP which is about 70% of the economy and why I say the "recovery" is over. In Q2 the consumer component of GDP was 0.07% from 1.46% in Q1. Based on historical correlations and today's sentiment data the Q3 consumer component will contract much further in the (2%) range. This will bleed into the fixed investment and inventory components of GDP causing further contraction.

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