Maybe, Just Maybe, the Consumer Understands That This Is a Long Slow Recovery
I have often told anyone that would listen that it will take to the end of this year for the US consumer to figure out that this is going to be a long, hard slog back to anything that looks like a "normal" economy (whatever that is). According to the survey results below it looks like the consumer just may be catching on. The consumer is finally figuring out that the stock market results are not matching the macroeconomic data, jobs are not returning anytime soon, and almost everyone is at risk of loosing their job. I don't know what the common greetings are in your part of the country, but I hear, "do you still have a job?" quite often. Also any response that is affirmative is considered good. Text in bold is my emphasis. From YahooNews.com:
U.S. consumers' moods soured in early July on persistent worries about jobs, a survey showed on Friday, offering little hope their spending will help the sputtering economic recovery.
Another report showed domestic demand for foreign goods slumped in May, reflecting persistently weak consumer spending, which helped shrink the monthly trade deficit to the smallest since 1999.
Consumer sentiment wilted in early July to the weakest since March, when confidence in the financial sector and economy was at a low, the Reuters/University of Michigan Surveys of Consumers showed.
Consumers' growing anxiety about a protracted economic downturn, job security and loss of wealth were key factors depressing sentiment, the survey said. Americans were also uneasy about the recent slip in stock prices, some analysts said.
"It underlines the ongoing gloom facing the U.S. consumer and further delays prospects for a near-term recovery. That will weigh heavily on risk sentiment," said Brian Dolan, senior currency strategist with Forex.com in Bedminster, New Jersey.
"Consumers concluded that the economic downturn would last longer and their personal finances would not recover as quickly as they had previously expected," the Reuters/University of Michigan Surveys of Consumers said in a statement. . . . .
. . . . Recent income gains were reported by the fewest consumers in the more than 50-year history of the survey, the statement said.
The survey's expectations component "has been seen as reasonably influenced by equity price moves. Having had a good quarter, equities are down so far in July, so we thought that would be a little bit of a subtraction," said John Ryding, chief economist with RDQ Economics in New York. . . . .
. . . . "Consumers reported a larger negative shift in their longer term outlook for the economy. The majority of consumers thought that widespread unemployment would persist over the next five years," the survey said. . . . . .
. . . . The U.S. trade gap narrowed unexpectedly to $26 billion in May, the smallest since November 1999, as exports rose and domestic demand for foreign goods slumped, the government said.
May's import level was the lowest since July 2004 and May marked the 10th straight month in which imports declined, underscoring the weakness in the U.S. economy.
The Commerce Department said exports increased 1.6 percent in May while imports fell 0.6 percent. Economists said the drop in imports signaled continued weakness in the recession-mired U.S. economy.
"The trade deficit report is another indicator that things are not improving as expected," said William Larkin, portfolio manager with Cabot Money Management in Boston. "There is growing pessimism about how quickly the U.S. will recover, which I think will be slower than people expect." . . . .