[Home] [Headlines] [Latest Articles] [Latest Comments] [Post] [Mail] [Sign-in] [Setup] [Help] [Register]
Status: Not Logged In; Sign In
Business Title: U.S. Consumers Most Negative Since Recession Consumer confidence in the U.S. economic outlook slumped in August to the lowest level since the recession, raising the risk that spending will dry up. The Bloomberg Consumer Comfort Indexs monthly expectations gauge dropped to minus 34, the weakest since March 2009, from minus 22 in July. The weekly measure of current conditions was minus 48.3 for the period ended Aug. 14 compared with minus 49.1, which was the worst reading since mid-May. The most unstable market in the history of American stocks, wage gains that are failing to keep up with inflation and unemployment hovering around 9 percent may be causing Americans to lose faith that the economy and their financial situations will soon improve. Applications for unemployment benefits climbed last week to the highest level in a month. The recent market volatility has exacted a toll on consumer confidence that will likely not ease any time soon, said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. Consumer sentiment has reached a critical tipping point that suggests households may pull back on spending. First-time claims for jobless insurance rose by 9,000 to 408,000 in the week ended Aug. 13, Labor Department figures showed today. Economists surveyed by Bloomberg News projected a rise to 400,000, according to the median forecast. The cost of living in the U.S. rose in July by the most in four months, led by gains in food and fuel, the Labor Department also said. The consumer-price index increased 0.5 percent from June, while worker pay failed to keep pace. Adjusted for inflation, hourly wages dropped 0.1 percent in July and were down 1.3 percent from the same month a year ago. Stocks declined today on concern about the global economy and that European banks lack sufficient capital. The Standard & Poors 500 Index dropped 3.2 percent to 1,156.12 at 9:39 a.m. in New York. The gauge has fallen 7.6 percent so far this month through yesterday. It rose or fell at least 4.4 percent in each of the first four days of last week, an unprecedented string of swings of such magnitude in consecutive days, according to data compiled by Birinyi Associates Inc., Bloomberg and Howard Silverblatt, senior index analyst at S&P. The drop in the Bloomberg economic expectations gauge was most severe among households earning $50,000 a year or more, married people and full-time workers, todays report showed. The change from last month stands out among some better- off groups, another troubling sign, Gary Langer, president of Langer Research Associates LLC in New York, which compiles the index for Bloomberg, said in a statement. The weekly comfort data showed declines in two of the indexs three components. The measure of Americans views of the current state of the economy dropped to minus 85.4 last week from minus 85.2 the prior period. The gauge of personal finances fell to minus 8.4, the lowest level since the first week of July. The buying climate index rose to minus 51.2, the first increase in five weeks, from minus 55. The Bloomberg comfort index, which began December 1985, has averaged minus 45.1 this year compared with minus 45.7 for all of 2010 and minus 47.9 in 2009, the year the recession ended, the report showed. Other reports have shown more volatility in confidence. The Thomson Reuters/University of Michigan preliminary index of consumer sentiment for August plunged to the weakest reading since May 1980, when the economy was contracting at a 7.9 percent annual pace. Shoppers at Wal-Mart Stores Inc., the worlds largest retailer, continue to be strained by economic conditions, Charles Holley, chief financial officer at the Bentonville, Arkansas-based company, said in a conference call with reporters this week. Consumers biggest concern is unemployment, rather than fuel or food costs, he said. The jobless rate dropped to 9.1 percent in July as thousands of discouraged workers left the labor force, figures from the Labor Department showed earlier this month. The Bloomberg Consumer Comfort Index is based on responses to telephone interviews with a random sample of 1,000 consumers aged 18 and over. Each week, 250 respondents are asked for their views on the economy, personal finances and buying climate; the percentage of negative responses is subtracted from the share of positive views and divided by three. The most recent reading is based on the average of responses over the previous four weeks. The monthly expectations gauge reflects the responses of 500 households polled over the past two weeks. The comfort index can range from 100, indicating every participant in the survey had a positive response to all three components, to minus 100, signaling all views were negative. The margin of error for the headline reading is 3 percentage points. Field work for the index is done by SSRS/Social Science Research Solutions in Media, Pennsylvania.
Post Comment Private Reply Ignore Thread Top Page Up Full Thread Page Down Bottom/Latest
#1. To: Brian S (#0)
(Edited)
here's what JP Morgan sent out yesterday as they announced a downgrade in expectations of U.S. economic performance over the next year: The GOP plan of sinking the economy to help their chances in 2012 is working.
Tagline for sale - inquire within
As predicted last November.
Never swear "allegiance" to anything other than the 'right to change your mind'!
|
[Home] [Headlines] [Latest Articles] [Latest Comments] [Post] [Mail] [Sign-in] [Setup] [Help] [Register]
|