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Business Title: Consumer Sentiment Drops to Three-Decade Low Confidence among U.S. consumers plunged in August to the lowest level since May 1980, adding to concern that weak employment gains and volatility in the stock market will prompt households to retrench. The Thomson Reuters/University of Michigan preliminary index of consumer sentiment slumped to 54.9 from 63.7 the prior month. The gauge was projected to decline to 62, according to the median forecast in a Bloomberg News survey. The biggest one-week slump in stocks since 2008 and the threat of default on the nation’s debt may have exacerbated consumers’ concerns as unemployment hovers above 9 percent and companies are hesitant to hire. Rising pessimism poses a risk household spending will cool further, hindering a recovery that Federal Reserve policy makers said this week was already advancing “considerably slower” than projected. “The mood is very depressed,” said Chris Christopher, an economist at IHS Global Insight Inc. in Lexington, Massachusetts. “Consumers are very fatigued and very uncertain. In the short term, people are going to pull back on spending.” Estimates of 69 economists for the confidence measure ranged from 59 to 66.5, according to the Bloomberg survey. The index averaged 89 in the five years leading up to the recession that began in December 2007. Stocks, which initially pared gains after the report, climbed as higher-than-estimated earnings tempered concern the economy is slowing. The Standard & Poor’s 500 Index rose 0.8 percent to 1,182.45 at 10:37 a.m. in New York. Treasuries increased, pushing down the yield on the benchmark 10-year note to 2.24 percent from 2.34 percent late yesterday. A report from the Commerce Department today showed sales at U.S. retailers climbed 0.5 percent in July, the most in four months, indicating consumers are holding up even as employment slows. Purchases excluding automobiles rose more than forecast. Today’s confidence figures parallel the Bloomberg Consumer Comfort Index, which fell to minus 49.1 in the period to Aug. 7, its lowest level since mid-May. The Michigan survey’s index of current conditions, which reflects Americans’ perceptions of their financial situation and whether it is a good time to buy big-ticket items like cars, fell to 69.3 from 75.8 the prior month. The index of consumer expectations for six months from now, which more closely projects the direction of consumer spending, decreased to 45.7 from 56 the prior month. Consumers in today’s confidence report said they expect an inflation rate of 3.4 percent over the next 12 months matching July as the lowest since February. Americans expected a 2.9 percent rate of inflation over the next five years, the figures tracked by Federal Reserve policy makers, the same as the prior month. Limited employment gains are a headwind for consumers. U.S. employers added 117,000 jobs in July as the unemployment rate fell to 9.1 percent. The cost of gas, which reached $3.70 earlier this month, could also be eating into Americans’ wallets. Consumer spending dropped in June for the first time in almost two years as savings climbed, the Commerce Department reported earlier this month. The economy grew at a 1.3 percent annual rate following a 0.4 percent gain in the prior quarter that was less than earlier estimated, Commerce Department figures showed. The Fed’s Open Market Committee said it may keep the benchmark interest rate close to zero through mid-2013 to bolster the recovery. Central bankers said they are “prepared to employ” additional tools to bolster an economy hobbled by weak hiring and anemic household spending. The announcement came after the biggest one-week plunge in stocks since November 2008 followed by the first-ever downgrade of the nation’s top credit rating. S&P’s credit downgrade came after lawmakers agreed on Aug. 2 to raise the nation’s debt ceiling and put in place a plan to enforce $2.4 trillion in spending reductions over the next 10 years, less than the $4 trillion S&P had said it preferred. Moody’s Investors Service and Fitch Ratings kept their top rankings on U.S. debt. Limited jobs gains and elevated gas prices are heightening the risk for slow growth in the second half of the year, said Donnie Smith, chief executive officer of Tyson Foods Inc. (TSN) “Unemployment’s still over 9 percent, gas prices continue to take a bigger piece of disposable income with the average price of unleaded peaking at almost $4 a gallon in May,” Smith said on an Aug. 8 conference call with analysts. “These macroeconomic factors have, of course, affected consumer behavior in both the foodservice and the retail channels.” Springdale, Arkansas-based Tyson, the biggest U.S. meat producer, said it will lose money in the chicken business this quarter as a weak economy eroded demand.
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#1. To: Brian S (#0)
Tyson will lose money on the chicken business? That's all Americans do is eat chicken. Americans can't afford chicken now? WTF?
With the economy still in the dumper -- maybe permanently? -- and full-time jobs becoming as scarce as rain during a drought, huge percentages of Americans have had their (misplaced) faith in the American dream shaken, the upper-middle-class consumerist lifestyle is exposed as a mirage for anybody who plays by the rules. Capitalism and the America that embraced it as a way of life is now and forever more a failure. It does me good to know that the generation that voted in Reagan and his ideology will see their America die from that ideology before their very own eyes and knowing they had a hand in its destruction.
Whole Tyson fryers have been selling for $.68lb around here all summer. I won't buy their crap but that is damned cheap.
Never swear "allegiance" to anything other than the 'right to change your mind'!
Americans are tired of buying chicken loaded with antibiotics, insecticides and hormones. It's amazing how many now are growing their own, plus they keep the bug populations down in the backyards.
We eat SPAM, now. YUMMY! I made a killing in the stock market last year with equities trading with Hormel, too.
Do you spice it up with hot sauce? A popular item around here is fried bologna sandwiches.
Spam is really fairly expensive at $2.50+ for 12 ounces.
My German granny served us kids that every time we visited.
I suppose I've tried them a couple of times. Regular, cold bologna sandwiches thousands of times.
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