Tags: Naroff | Conference | Board | confidence

Consumers Are Not Worrying and Feeling Happy

Tuesday, 25 Sep 2012 12:17 PM

INDICATOR: September Conference Board Consumer Confidence Index

KEY DATA: Confidence: 70.3 (Up 9 points); Expectations: Up 12.6 points; Present Situation: Up 3.7 points

IN A NUTSHELL: “Not even $2 billion in negative ads could depress the consumer who seems to believe that things are getting better.”

WHAT IT MEANS: Consumers have been in the doldrums lately and for very good reasons. Job growth has slowed, wages are stagnant, high gasoline prices are depressing and those of us in swing states have been inundated by a tsunami of negative ads telling us that if we vote for the wrong person, which apparently is everyone running, the end will come.

So, how have people reacted? By not worrying and feeling happy.

The Conference Board’s Consumer Confidence Index jumped in September, led by a surge in optimism about the future. The job market is still considered really tough, but workers seem to think there will be a growing number of openings going forward.

And they even believe their incomes will rise.

MARKETS AND FED POLICY IMPLICATIONS: I have been on the optimistic side of things for quite a while, and I guess if you say the same thing over and over, eventually you will be right. Maybe I am right this time.

Today’s housing reports were very upbeat and there was even a surprisingly positive Richmond Fed Manufacturing Survey.

Could it be that the nattering nabobs of negativity know nothing? I wouldn’t go that far, as the economy is hardly surging and all reports are that the rest of the world is slowing down.

Still, it is hard to believe that the economy is headed for a crash. The biggest constraint to growth is government, in particular, the fiscal cliff.

My view is that the election itself, regardless of who wins, will remove much of the uncertainty restraining businesses. As long as the inmates who have taken over the asylum don’t drive the company car off the cliff, growth should start accelerating during the latter part of this year and especially early in 2013, as the drought impact wears off.

Nothing would reinforce that than a more confident consumer who spends a few more bucks on things other than the iPhone 5. I suspect investors feel the same way.

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JoelNaroff
Not even $2 billion in negative ads could depress the consumer who seems to believe that things are getting better.
Naroff,Conference,Board,confidence
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2012-17-25
Tuesday, 25 Sep 2012 12:17 PM
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