A falling consumer confidence is one of the strongest leading indicators for an economic downturn.
I don’t think anyone should be surprised about this. Americans are noticing that the the amazingly expensive, bloated stimulus package has not produced the promised results. The more astute recognize that the Cap and Trade bill and the planned healthcare bill will take a huge hit on the economy.
Despite all the promises of “smart diplomacy,” even our former staunch allies like Great Britain and Germany don’t trust Obama.
North Korea keeps kicking sand in our face and we blew our chance to support the Iranians. When the communist Polish government cracked down on Solidarity, Reagan took an immediate stand in defense of freedom. Obama waffled for a week.
The telling paragraph is at the end: Economists predicted that consumer confidence would rise from 54.8 to 55.0. Instead, it fell an astonishing 5.3 points – almost 10%.
There really isn’t much good news at all.
From Reuters:
WASHINGTON (Reuters) - U.S. consumer confidence took an unexpectedly steep slide in June, figures released on Tuesday showed, suggesting the 18-month-long recession had yet to loosen its grip on the economy.
A separate report on April house prices in major cities offered some encouraging signs that the worst of the housing slump may be over, but that was not enough to lift investors’ spirits, while another crop of economic data showed business activity in New York City and the Midwest remained weak and retail chains slogged through a rough June.
Billionaire investor George Soros added to the cautionary tone, saying fears of inflation would drive up borrowing costs and choke off growth once financial markets recover.
Major stock market indexes turned lower after the Conference Board’s consumer confidence index showed households felt gloomier about their current situation, and less optimistic about the eventual economic recovery.
Kevin Kruszenski, head of listed trading at Keybanc Capital Markets in Cleveland, said the confidence data “kind of took the wind out of things a little bit.”
The confidence index fell to 49.3 in June from 54.8 in May. Economists polled by Reuters had expected a healthier reading of 55.0 for this month.
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