Tuesday, October 25, 2011

Consumer Uncertainty


  1. Though consumer confidence tends to be a lagging indicator, it still plays a role in consumer spending decisions (in addition to labor income and net wealth). The current trend for real consumer spending is down (see chart below) and, with tepid wage growth and lower stock prices hitting household wealth, the prospect of economic recovery is ever smaller.


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  2. Interesting but not surprising. August sucked and September was pretty good because a lot of people went back to school and bought clothes and computer stuff. So it's natural to see confidence drop in October.