Dwindling consumer confidence looms bleak for holidays
By Maxine Shapiro, KERA 90.1 business commentator
Dallas, TX – The market trend of ignoring economic data will most likely be broken today as we enter into the homestretch of the earning season. There's no turning our back on this one. I'm Maxine Shapiro with KERA Marketplace Middays.
By now, you might have heard that the ever so reliable, most-of-the-time-optimistic, regularly confident consumer - is not so confident. The Conference Board, a non-profit independent organization who conducts the research and analysis for this, closely watched measure of consumer confidence reported a 9-year low for October. Consensus among economists for this month's was 90 - just about 3 points down from September. Surely no one expected this bleak drop of more than 14 points to 79.4? So now discussions will turn to the holiday season.
Consumer spending fuels two-thirds of the economy. And over the past year, the consumer has more than obliged, keeping spending at a seasonal pace. Sure, retailers this summer would have liked to have heard more cash registers ringing or computers clicking but it just never got hot enough to warrant shopping for a new wardrobe.
But Mother Nature is the least of the problems consumers are thinking about. The labor market can't get out of bed, the president is "losing patience" with the UN Security Counsel, the stock market only recently decided it was bored with going down every day, investors are playing the game "Who Can You Trust," and an analyst at Merrill Lynch used the word "yuck" to describe the economy.
Just last week, 21% of economists surveyed believed Greenspan and Company would lower interest rates next week. And the beginning of this week, it was 60%, and that was before this mornings figure.
So, unlike the child who is sent outside when bad news is being discussed, we the consumers are very aware of what is going on around us. Paradoxically, not all consumers react the same way to negative news. Some actually some find solace in strolling through the bright shiny displays of the shopping malls. We did it last year. I'm not ready to predict this year. For KERA Marketplace Middays, I'm Maxine Shapiro.
Marketplace Midday Reports air on KERA 90.1 Monday - Friday at 1:04 p.m. To contact Maxine Shapiro, please send emails to firstname.lastname@example.org.