Some funny quotes in the latest weekly ABC Consumer Comfort Index poll, which incidentally dropped from -43 to -46, just inches away from the 2010 lows, but more importantly, just inches away from the lows seen throughout the entire depression, as consumer sentiment has gone nowhere fast in the past two years: "Recession Ends, Nobody Notices." Indeed, as the chart below shows, ABC's weekly poll of about 1,000 random people shows nothing at all good for the economy, which, oh yes, is now out of the recession, but not the depression. And for technicians out there, the reading of 46 dropped just below the 52 week average of -45.98. Joking aside, the report found that: "This week 89 percent of Americans rate the economy negatively, 75 percent say it’s a bad time to spend money and 55 percent rate their own finances negatively." Surely these are the Green shoots that forced Larry Summers to realize that destroying the Harvard endowment is a far less dangerous job than continuing to bring ruin and pestilence to all of America.
Indeed consumer views of current conditions don’t necessarily anticipate the climb out of a trough. While the 1990-91 recession officially ended in March 1991, the CCI didn’t regain its pre-recession level until June 1994 – far too late for the political fortunes of the first President Bush, voted out in 1992 amid continued economic discontent. The CCI in mid-September 1992 was -42, much like it is now.
The challenge, as we showed last week, is employment; the CCI correlates with it strongly, and it’s still weak. The chart below shows that the CCI also correlates with yearly change in the GDP, a basis for dating recessions. For growth to become robust, it suggests, consumer views have a ways to go.
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