Tags: Consumer | Sentiment | Bodes | Poorly | Obama | us | economy

Plunging Consumer Sentiment Bodes Poorly For Obama

Thursday, 02 Jun 2011 08:29 AM

President Barack Obama may follow the path of one-term Presidents Jimmy Carter and George H.W. Bush if consumer sentiment rates are any indication.

The consumer confidence index shrank in May to 60.8 from 66.0 in April due to growing pessimism about jobs and incomes, according to the Conference Board.

The index serves as a weather vane for the economy, and has also done likewise for politicians, says Steve Blitz, an economist at ITG Investment Research.

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Barack Obama
(Getty Images photo)
“There is plenty of time for the national mood to change, but the decline in income expectations is particularly telling,” says Blitz, The Wall Street Journal reports.

Obama’s popularity enjoyed a fresh shot in the arm with the killing of Osama bin Laden.

Yet a sluggish economy can wipe all that out.

Weak consumer sentiment indices arguably derailed Jimmy Carter’s reelection at the end of the 1970s and George H.W. Bush’s in the early 1990s.

Eighteen months before each election the index stood below 100, at 76.4 in May 1991 and at 96.0 in May 1979, according to the Journal.

More bad economic news continues to grab headlines.

An ADP Employer Services report shows private employers added a 38,000 jobs in May, Reuters reports, adding the numbers fell below forecasts for a gain of 175,000 jobs for May.

"We've seen general softening in U.S. data, and that's a concern about how the recovery is maintaining itself," says Camilla Sutton, senior currency strategist at Scotia Capital in Toronto, according to Reuters.


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President Barack Obama may follow the path of one-term Presidents Jimmy Carter and George H.W. Bush if consumer sentiment rates are any indication. The consumer confidence index shrank in May to 60.8 from 66.0 in April due to growing pessimism about jobs and incomes,...
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