Although the powers that be say things are getting better, the average Joe still isn't buying it (no pun intended). According to the latest Gallup Economic Weekly, the urge to splurge remains lacking (italics mine):
Self-reported consumer spending was down more than 20% in each of the last three weeks from last year's depressed weekly comparables. At the same time, Gallup's Economic Confidence and Job Creation Indexes were essentially unchanged.
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Consumer Spending fell slightly last week, as self-reported daily spending in stores, restaurants, gas stations, and online averaged $73 -- down $2 from the previous week. More importantly, it was down 22% from last year's comparable, when average spending was $94 per day. For the third week in a row, consumer spending has trailed last year's anemic spending levels by more than 20%. While it remains unclear how consumers' spending is being divided between Christmas gifts and other discretionary spending for such things as travel, entertainment, and eating out, consumers are reporting a significant decline in their perceived spending during recent weeks. (This week's consumer spending level may be slightly overstated, as Gallup did not interview on Tuesday and Wednesday last week, days on which spending estimates are typically lower.) Even with this year's much better inventory controls, many retail merchants may be feeling the need to unload goods as Christmas approaches, providing good buying opportunities for consumers with money yet to spend.
Otherwise, is it me, or is today's renewed pledge by the Federal Reserve to keep interest rates "exceptionally low" for "an extended period," even though policymakers (including Time magazine's "Person of the Year") believe the economy is strengthening, something of a non sequitur?
Something is wrong. However I like to watch MSNBC because it makes you feel good.
Posted by: matt | December 17, 2009 at 08:39 AM
By keeping interest rates low, the Federal Reserve gets to prop up the financial system with low cost money at the expense of savers instead of at the expense of the government. I lose a little interest on my savings account, but my IRA account has come back from the dead. I suppose they are resorting to the least painful of all the options that are available. Just remember, we the people elected all those people in Washington who failed to balance the budget year after year and failed to provide proper financial oversight. When is the last time your Congressman ever called for higher interest rates to quell speculation or called for the closure of a military base in his district to save money? Many politicians ran on a platform of stopping gay marriage and opposing abortion. We got what we wanted, but we also got a horrible economy, even if things are not as bad as during the 1930's.
Posted by: Rocky | December 17, 2009 at 10:59 AM
Comeon Michael, I hate these 'sentiment' surveys because people are horrible at predicting their own behavior.
Pollster: "Are you going to be frugal this holiday season?"
Responder: "Oh, yea, yea. I have to be careful, we are in a recession. Definitely. I am I will still buy that Amazon Kindle. That thing is pretty cool. And I obviously need to buy an ITouch for my daughter. But, yea, yea, I'll be very frugal. Definitely."
Posted by: Roman | December 17, 2009 at 11:08 AM
this one is amazinghttp://video.google.com/videoplay?docid=5064665078176641728&hl=en#
Posted by: roger | December 17, 2009 at 04:33 PM
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Self-reported consumer spending was down more than 20% in each of the last three weeks from last year's depressed weekly comparables....
it aint suprise...
check out monthly tresury statement.. 'personal income taxes' paid down about 22% 2008 y/y
nice correlation.. hah..
worse,, corp taxes down about 50% y/y.. I guess
we will see sp500 goes back to 500-600 level where it belongs
and ITS NOT EVEN BOTTOM... and that's scary..
alex
Posted by: alex west | December 18, 2009 at 06:44 AM