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Langone: 'Consumers More Cautious Now Than I've Ever Seen'

By    |   Wednesday, 10 December 2014 07:22 PM

Many analysts are growing increasingly optimistic about the U.S. economy, in light of recent data such as the 321,000 surge in November nonfarm payroll employment. 

But Home Depot co-founder Ken Langone is more circumspect, especially when it comes to the consumer sector. "The consumer is more cautious now than I've ever seen them," he told CNBC

The Conference Board's consumer confidence index fell to 88.7 in November from 94.1 in October. 

Stagnant income remains a problem for many Americans, Langone notes. Average hourly wages rose only 2.1 percent in the 12 months through November, barely exceeding the 1.7 percent increase in consumer prices in the 12 months through October.

"We have to do something to get the lower-income people to the party. It isn't just jobs. It's pay," Langone said. 

The economy expanded 3.9 percent annualized in the third quarter, and many economists expect growth to total at least 3 percent through next year. But Langone isn't so sure. "We're going to have a very tepid [economic] recovery," he said.

Corporate chieftains apparently are losing enthusiasm in the economy themselves.

The Business Roundtable CEO Economic Outlook Index, which measures chief executive officers' expectations of  for sales, capital spending and hiring over the next six months, slid to 85.1 this quarter from 86.4 in the third quarter. The survey polled 129 Business Roundtable CEOs.

"The economy ended the year essentially where it started, performing below its potential," Randall Stephenson, chairman of Business Roundtable and CEO of AT&T, said in a statement.

"Congress and the administration should act now on tax extenders and trade promotion authority to encourage additional business investment to help the economy grow and create more jobs."

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Home Depot co-founder Ken Langone worries about the effect of stagnant wages on the economy. "We have to do something to get the lower-income people to the party. It isn't just jobs. It's pay," he told CNBC.
Langone, consumers, more, cautious
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2014-22-10
Wednesday, 10 December 2014 07:22 PM
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