Discover(R) card's Rasmussen-conducted U. S. Spending Monitor came out with its September survey. Here's the intro:
Consumers' views about the economy were unchanged from August to September, but the number of consumers feeling that their personal finances are getting worse rose for the sixth consecutive month and reached a nine-month high, according to the Discover U.S. Spending Monitor.
The Monitor, a poll of 8,200 consumers tracking consumer confidence and spending intentions on a daily basis, held steady in September, dropping just 0.5 points to 85.7. Overall, 57 percent of consumers rated the economy as poor, unchanged from August and 51 percent felt economic conditions were getting worse, just 1 point higher than August. But the number of consumers who felt their personal finances were getting worse rose for the sixth straight month to 49 percent. In April, just 43 percent felt their finances were getting worse. Economic and financial uncertainty has more consumers planning to trim discretionary spending in the month ahead.
This comports with the ongoing Gallup.com's daily reports on how people's individual spending patterns are, and on this week's ABC News Consumer Comfort Index, which reported:
A gain of sorts in optimism about the economy’s future isn’t reflected in views of current conditions: the ABC News Consumer Comfort Index is as bad as ever, indeed its lowest this week in the past two months.
The weekly CCI, produced for ABC News by Langer Research Associates, stands at -47 on its scale of +100 to -100, compared with its 24-year average of -13. After flirting with the low-40s, it’s back within sight of -50, its unofficial death zone.
The data continue to be consistent with the contained depression with a cyclical upturn scenario, otherwise known as the Japan scenario. For now, with the fall in the 2-5 year Treasury yields to all-time lows and in the 10-year yield to multi-decade lows except for a brief period in Dec. 2008-Jan. 2009, the financial world is holding together. There are no signs that the Grecian scenario of lenders pulling the plug on the U. S. is in the cards for now.
The absolute gap in yield between the 10 year and the 30 year Treasuries is at or near record levels, and perhaps more relevant is the ratio between the two, which at over 1.5:1 may have soared well into record territory.
The market is taking the rational approach, implicitly forecasting a return to historically normal interest rates in years 11-30. The flip side of that is that buyers of 10 year bonds are giving up the certainty of higher current return every year for the next 10 years for the possibility that in the longer term, sufficiently good investment returns will be available and will be chosen to more than make up for the higher current income.
Increasingly I am tacking to the long end.
Copyright (C) Long Lake LLC 2010
Showing posts with label Discover U.S. Spending Monitor. Show all posts
Showing posts with label Discover U.S. Spending Monitor. Show all posts
Thursday, October 7, 2010
Friday, July 9, 2010
Implications of Slow Economic Growth
The Economic Cycle Research Institute reports today that WLI Growth Falls Further. This joins a host of other reports, ranging from Discover's U. S. Spending Monitor being down again in June to various disappointing surveys of small business that the economy is sluggish. The Reuters ECRI press release is terse today:
A measure of future U.S. economic growth fell to the lowest since July 2009, indicating that the economy will continue to slow, a research group said on Friday.
The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index fell to 121.5 for the week ended July 2, down from 122.3 in the prior week. That was the lowest level since July 24, 2009 when it stood at 120.3. The index's annualized growth rate fell to -8.3 percent after a -7.6 percent growth rate a week earlier.
This level of economic activity is nothing horrible in and of itself, but matters are out of balance related to debt and opaque derivatives. Governmental debt has increased more than consumer or business debt has diminished; and what passes for "austerity" in such places as the U. K. is any but austere, simply less improvident. It now appears that a significant slowdown in the recent economic growth rate is baked in the cake. So far as my research on the ECRI site allows, an 8.3% negative growth rate (as defined privately by ECRI) in the WLI has always been associated with recession. Yet ECRI's other indicators don't allow it to call an upcoming recession, so I'm certainly not qualified to opine on that topic.
As a borrower in its own currency and wishing to maintain the fiction of never having defaulted (despite having more or less overtly having defaulted first under FDR and again under Nixon), it makes sense for the Feds to devalue against as many countries from which it imports as possible. The "traditional" response of domestic inflation, or at least anti-deflation, will allow loans that are now underwater to look good.
In the WW II and Korean War periods, short rates were kept ultra-low even when inflation raged. This may be happening now, depending on what one thinks prices are doing. Since precious metals are no longer cheap, how does an American handle capital?
Granted that markets are efficient, we can consider that just perhaps the markets are giving too much credence to the idea that U. S. finances are 'AAA'. In that case, perhaps small countries with records of truly no defaults may offer foreign currency gains plus a current yield. This could include Norway and New Zealand. Larger "smaller" countries could include Australia and Canada, but the former is at risk from a major economic slowdown in China and the latter may be seeing a housing mini-bubble begin to burst.
Another approach involves multi-national financially strong companies. AAPL, MCD, etc. High quality U. S. companies screen very well in Jeremy Grantham's 7-year asset price projection, a series which has often been prescient. Given that a BP-type disaster can befall almost any company, and unless one is very diversified, one disaster can sink such a strategy, this strategy is not for the faint of heart.
Meanwhile, regular readers know that I have had kind words to say about Treasuries on and off for quite some time. Now I think they are for gamblers and that cash is prospectively about as good as Treasuries and therefore better given complete liquidity. Yes, the 10-year yield could go to new lows. But it could blow out to very high levels faster than almost anyone thinks. So, new money likely will be better off elsewhere, in my humble opinion.
These are unprecedented times with the lowest short-term interest rates in history in some major countries. As with very high and very low temperatures where strange physico-chemical rules may apply, the same may well come to pass in the economy and the financial markets. Flexibility may be more important than any specific prediction, given how abnormal the "New Normal" is.
Copyright (C)Long Lake LLC 2010
A measure of future U.S. economic growth fell to the lowest since July 2009, indicating that the economy will continue to slow, a research group said on Friday.
The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index fell to 121.5 for the week ended July 2, down from 122.3 in the prior week. That was the lowest level since July 24, 2009 when it stood at 120.3. The index's annualized growth rate fell to -8.3 percent after a -7.6 percent growth rate a week earlier.
This level of economic activity is nothing horrible in and of itself, but matters are out of balance related to debt and opaque derivatives. Governmental debt has increased more than consumer or business debt has diminished; and what passes for "austerity" in such places as the U. K. is any but austere, simply less improvident. It now appears that a significant slowdown in the recent economic growth rate is baked in the cake. So far as my research on the ECRI site allows, an 8.3% negative growth rate (as defined privately by ECRI) in the WLI has always been associated with recession. Yet ECRI's other indicators don't allow it to call an upcoming recession, so I'm certainly not qualified to opine on that topic.
As a borrower in its own currency and wishing to maintain the fiction of never having defaulted (despite having more or less overtly having defaulted first under FDR and again under Nixon), it makes sense for the Feds to devalue against as many countries from which it imports as possible. The "traditional" response of domestic inflation, or at least anti-deflation, will allow loans that are now underwater to look good.
In the WW II and Korean War periods, short rates were kept ultra-low even when inflation raged. This may be happening now, depending on what one thinks prices are doing. Since precious metals are no longer cheap, how does an American handle capital?
Granted that markets are efficient, we can consider that just perhaps the markets are giving too much credence to the idea that U. S. finances are 'AAA'. In that case, perhaps small countries with records of truly no defaults may offer foreign currency gains plus a current yield. This could include Norway and New Zealand. Larger "smaller" countries could include Australia and Canada, but the former is at risk from a major economic slowdown in China and the latter may be seeing a housing mini-bubble begin to burst.
Another approach involves multi-national financially strong companies. AAPL, MCD, etc. High quality U. S. companies screen very well in Jeremy Grantham's 7-year asset price projection, a series which has often been prescient. Given that a BP-type disaster can befall almost any company, and unless one is very diversified, one disaster can sink such a strategy, this strategy is not for the faint of heart.
Meanwhile, regular readers know that I have had kind words to say about Treasuries on and off for quite some time. Now I think they are for gamblers and that cash is prospectively about as good as Treasuries and therefore better given complete liquidity. Yes, the 10-year yield could go to new lows. But it could blow out to very high levels faster than almost anyone thinks. So, new money likely will be better off elsewhere, in my humble opinion.
These are unprecedented times with the lowest short-term interest rates in history in some major countries. As with very high and very low temperatures where strange physico-chemical rules may apply, the same may well come to pass in the economy and the financial markets. Flexibility may be more important than any specific prediction, given how abnormal the "New Normal" is.
Copyright (C)Long Lake LLC 2010
Wednesday, February 3, 2010
Real Consumer Economy Remains Depressed
Consumers remain stuck in a rut. The Discover(R) U. S. Spending Monitor rose from a depressed level in January.
The related linked graph demonstrates the "going-nowhere-fast" nature of the non-recovery in the real consumer economy.
These findings correlate with the continued miserable, near-trough levels of consumer spending and workers' observations of hiring or letting go at their companies at Gallup.com, with ABC's Consumer Comfort Index near its worst levels of the downturn as well.
Absent massive government and Federal Reserve intervention aka money-printing, there is no doubt that the consumer "recession" (depression) would be continuing.
Note that special stock market strength is found in Dollar Tree (DLTR) and slightly higher-end TJX, and in the generic drug company Teva (TEVA). Signs of the times.
Toll Brothers (TOL), a luxury homebuilder, is becalmed on the stock market, with earning estimates for the fiscal year ending fall 2011 steadily dropping and now not far above breakeven.
America has turned into a pretend economy.
Copyright (C) Long Lake LLC 2010
The related linked graph demonstrates the "going-nowhere-fast" nature of the non-recovery in the real consumer economy.
These findings correlate with the continued miserable, near-trough levels of consumer spending and workers' observations of hiring or letting go at their companies at Gallup.com, with ABC's Consumer Comfort Index near its worst levels of the downturn as well.
Absent massive government and Federal Reserve intervention aka money-printing, there is no doubt that the consumer "recession" (depression) would be continuing.
Note that special stock market strength is found in Dollar Tree (DLTR) and slightly higher-end TJX, and in the generic drug company Teva (TEVA). Signs of the times.
Toll Brothers (TOL), a luxury homebuilder, is becalmed on the stock market, with earning estimates for the fiscal year ending fall 2011 steadily dropping and now not far above breakeven.
America has turned into a pretend economy.
Copyright (C) Long Lake LLC 2010
Wednesday, October 7, 2009
"Discover"-ing Slow Economic Improvement
"Discover" - the card people- do a monthly survey of consumer finances. The September data are out, published in Discover® U.S. Spending MonitorSM Up 2 Points in September.
The subtitle tells most of the tale: Confidence in the Economy Reaches Monitor High, But Consumer Spending Intentions Remain Flat.
Note that a "Monitor High" has limited meaning, as the survey has a 2 1/2 year history. Nonetheless, more and more data points are consistent with a troughing in the economic cycle associated with high joblessness. If Jimmy Carter put through a tax credit to encourage businesses to hire workers long after the 1973-5 recession ended, you can expect the current Democratic leaders to channel him and them some, with the major limitation what the financial markets will allow.
There is thus the possibility of a further delay in the projected shrinkage of the Federal budget deficit. The bond market would not likely take that well.
Copyright (C) Long Lake LLC 2009
The subtitle tells most of the tale: Confidence in the Economy Reaches Monitor High, But Consumer Spending Intentions Remain Flat.
Note that a "Monitor High" has limited meaning, as the survey has a 2 1/2 year history. Nonetheless, more and more data points are consistent with a troughing in the economic cycle associated with high joblessness. If Jimmy Carter put through a tax credit to encourage businesses to hire workers long after the 1973-5 recession ended, you can expect the current Democratic leaders to channel him and them some, with the major limitation what the financial markets will allow.
There is thus the possibility of a further delay in the projected shrinkage of the Federal budget deficit. The bond market would not likely take that well.
Copyright (C) Long Lake LLC 2009
Wednesday, September 2, 2009
People More Hopeful But Can't Spend the Hope
Discover Financial sponsors a large poll of consumers. The upbeat title of its August survey is unfortunately misleading. Discover® U.S. Spending MonitorSM Rebounds in August, Rising 3.5 Points as More Consumers Gain Confidence in the Economy is the title, but the rise is all in the expectations. Here are some of the facts:
For the third straight month, over 50 percent of consumers plan on cutting discretionary personal spending in the month ahead. In August, 52 percent planned on spending less on going out to dinner, movies, or sporting events. Other than May 2009, this number has stayed at or above 50 percent for the last 18 months.
Despite the recent improvements in the housing market, more consumers, 53 percent, plan on cutting home improvement expenses in the month ahead, a 3-point increase from July. Nearly half, 48 percent, are also planning to cut major personal purchases, like vacations, out of their budgets.
The following is telling:
Improved economic and financial confidence did not lead to more consumers having money left over after paying the monthly bills. Only 46 percent reported money left over in August, a Monitor-low and 5 points lower than a year ago. Furthermore, of those who did have money left over, 22 percent reported having less money left over than the previous month, a 3-point rise from July and the highest this number has been since December 2008.
Here's the only real "sort-of" good news:
Only 46 percent of consumers feel economic conditions are getting worse, a Monitor low and 6 points less than July. In August 2008, 65 percent of consumers felt economic conditions were deteriorating.
An improved economic outlook also correlates with less consumers feeling their finances are getting worse. In August, 46 percent of consumers felt their finances were headed in the wrong direction, a 5-point improvement from July and the lowest this number has been since December 2007.
Regarding the above two paragraphs, the first can be discounted because most people have only a vague grasp of the general economy. Even "experts" don't know much! Re the second paragraph, it's not clear how to square that with the personal data showing only 46% of respondents having money left over after paying their bills, a Monitor-low number.
Overall, this poll of 8200 people polled nightly throughout August is consistent with the Gallup data that shows that people are more optimistic about the future than they are actually seeing improvement in the here and now. I would posit that this explains the stock market rise and that there has been a positive feedback loop therein. A falling stock market and some downbeat talk out of "authorities" could similarly feed on itself, given the reality of year on year aggregate loss of wages and therefore buying power.
Further unfortunately, many profitable companies such as IBM and P&G have no or negative tangible net worth, so if stock prices start falling, they are in the same boat as consumers: lacking reserves to cushion bad times. No one can know where the bottom is if their business prospects turn down because they have become so leveraged.
Copyright (C) Long Lake LLC 2009
For the third straight month, over 50 percent of consumers plan on cutting discretionary personal spending in the month ahead. In August, 52 percent planned on spending less on going out to dinner, movies, or sporting events. Other than May 2009, this number has stayed at or above 50 percent for the last 18 months.
Despite the recent improvements in the housing market, more consumers, 53 percent, plan on cutting home improvement expenses in the month ahead, a 3-point increase from July. Nearly half, 48 percent, are also planning to cut major personal purchases, like vacations, out of their budgets.
The following is telling:
Improved economic and financial confidence did not lead to more consumers having money left over after paying the monthly bills. Only 46 percent reported money left over in August, a Monitor-low and 5 points lower than a year ago. Furthermore, of those who did have money left over, 22 percent reported having less money left over than the previous month, a 3-point rise from July and the highest this number has been since December 2008.
Here's the only real "sort-of" good news:
Only 46 percent of consumers feel economic conditions are getting worse, a Monitor low and 6 points less than July. In August 2008, 65 percent of consumers felt economic conditions were deteriorating.
An improved economic outlook also correlates with less consumers feeling their finances are getting worse. In August, 46 percent of consumers felt their finances were headed in the wrong direction, a 5-point improvement from July and the lowest this number has been since December 2007.
Regarding the above two paragraphs, the first can be discounted because most people have only a vague grasp of the general economy. Even "experts" don't know much! Re the second paragraph, it's not clear how to square that with the personal data showing only 46% of respondents having money left over after paying their bills, a Monitor-low number.
Overall, this poll of 8200 people polled nightly throughout August is consistent with the Gallup data that shows that people are more optimistic about the future than they are actually seeing improvement in the here and now. I would posit that this explains the stock market rise and that there has been a positive feedback loop therein. A falling stock market and some downbeat talk out of "authorities" could similarly feed on itself, given the reality of year on year aggregate loss of wages and therefore buying power.
Further unfortunately, many profitable companies such as IBM and P&G have no or negative tangible net worth, so if stock prices start falling, they are in the same boat as consumers: lacking reserves to cushion bad times. No one can know where the bottom is if their business prospects turn down because they have become so leveraged.
Copyright (C) Long Lake LLC 2009
Sunday, August 9, 2009
Discovering Consumers Don't Necessarily Feel the Love That Wall Street Feels They Should Be Feeling
Noted on Zero Hedge, a link to the following from Discover Financial Services (the credit card issuer):
Discover® U.S. Spending MonitorSM Falls for Second Consecutive Month as More Consumers Grow Concerned about the Economy and Their Finances
First Time Since March That a Majority of Consumers Plan to Spend Less on Discretionary, Home Improvement and Major Personal Purchases
RIVERWOODS, Ill.--(BUSINESS WIRE)--Aug. 5, 2009-- The Discover U.S. Spending Monitor fell for the second consecutive month from 85.6 to 83.5 (based out of 100), as consumer attitudes towards the economy and the current state of their personal finances continued to deteriorate. Overall, 61 percent rated current economic conditions as poor, a 2-point increase from the previous month.
The drop in economic confidence also appears to be weighing on consumer attitudes about their personal finances. Only 32 percent currently rate their finances as good or excellent, a Monitor low and a 1-point drop from last month. Twenty-five percent currently rate their finances as poor, tying a Monitor high.
Their growing pessimism toward the economy and their finances has more consumers planning to cut back on spending overall.
Anticipated Spending Falls for First Time Since February; Majority of Consumers Planning Cutbacks on All Discretionary Purchases
The number of consumers expecting to spend more in the month ahead fell to 21 percent in July, a 2-point decrease from June and the first drop since February. The fall coincided with a 6-point decrease in the number of consumers expecting to spend more on household expenses like gas and groceries. For July, only 29 percent of consumers expected to spend more on household expenses. That’s a significant change year-over-year. Last year at this time, when gas prices were reaching record highs, 57 percent of consumers were planning to spend more on household expenses.
Despite gas prices being well below the records set a year ago, the number of people planning to spend less on discretionary spending in the month ahead is similar to what was reported in July 2008. Fifty-three percent are planning to spend less on discretionary purchases like going out to dinner or the movies, 50 percent plan on spending less on home improvement purchases, and half plan on spending less on major personal purchases like a vacation. This is also the first time since March that a majority of consumers are planning cutbacks in all of the discretionary spending categories surveyed.
“Despite some positive signs in the economy, consumers are showing no intentions of increasing their spending,” said Julie Loeger, senior vice president of brand and product management for Discover. “With a Monitor-low 32 percent feeling their personal finances are good or excellent, it is no surprise that consumers are continuing to cut back.”
The cutbacks consumers are making toward discretionary spending aren’t having a positive effect on consumer savings either. Forty-two percent expect to save or invest less in the month ahead, tying a Monitor high, while only 9 percent expect to save or invest more, a Monitor low.
Monitor-Low 47 Percent Expect to Have Money Left Over After Paying Monthly Bills . . .
Majority of Consumers Feel Economy, Personal Finances are Getting Worse
For the first time since February, there was an increase in the number of consumers feeling economic conditions are worsening. Fifty-two percent feel economic conditions are deteriorating. This is the highest this number has been since March.
An increasing number of consumers also are concerned over the direction of their personal finances. Fifty-one percent feel their finances are getting worse, a 2-point increase from June and also the highest this number has been since March.
“The optimism consumers showed about the economy during the spring has faded during the summer,” said Loeger. “Unemployment is still rising and while some are saying the worst is over, the majority of consumers surveyed by the Monitor in July currently don’t feel that way. Until they do, consumers are unlikely to start spending again.”
This report is consistent with Gallup's poll (www.gallup.com) showing that average spending by consumers over the past 14 days (rolling average) is near its lows for this economic cycle.
Copyright (C) Long Lake LLC 2009
Discover® U.S. Spending MonitorSM Falls for Second Consecutive Month as More Consumers Grow Concerned about the Economy and Their Finances
First Time Since March That a Majority of Consumers Plan to Spend Less on Discretionary, Home Improvement and Major Personal Purchases
RIVERWOODS, Ill.--(BUSINESS WIRE)--Aug. 5, 2009-- The Discover U.S. Spending Monitor fell for the second consecutive month from 85.6 to 83.5 (based out of 100), as consumer attitudes towards the economy and the current state of their personal finances continued to deteriorate. Overall, 61 percent rated current economic conditions as poor, a 2-point increase from the previous month.
The drop in economic confidence also appears to be weighing on consumer attitudes about their personal finances. Only 32 percent currently rate their finances as good or excellent, a Monitor low and a 1-point drop from last month. Twenty-five percent currently rate their finances as poor, tying a Monitor high.
Their growing pessimism toward the economy and their finances has more consumers planning to cut back on spending overall.
Anticipated Spending Falls for First Time Since February; Majority of Consumers Planning Cutbacks on All Discretionary Purchases
The number of consumers expecting to spend more in the month ahead fell to 21 percent in July, a 2-point decrease from June and the first drop since February. The fall coincided with a 6-point decrease in the number of consumers expecting to spend more on household expenses like gas and groceries. For July, only 29 percent of consumers expected to spend more on household expenses. That’s a significant change year-over-year. Last year at this time, when gas prices were reaching record highs, 57 percent of consumers were planning to spend more on household expenses.
Despite gas prices being well below the records set a year ago, the number of people planning to spend less on discretionary spending in the month ahead is similar to what was reported in July 2008. Fifty-three percent are planning to spend less on discretionary purchases like going out to dinner or the movies, 50 percent plan on spending less on home improvement purchases, and half plan on spending less on major personal purchases like a vacation. This is also the first time since March that a majority of consumers are planning cutbacks in all of the discretionary spending categories surveyed.
“Despite some positive signs in the economy, consumers are showing no intentions of increasing their spending,” said Julie Loeger, senior vice president of brand and product management for Discover. “With a Monitor-low 32 percent feeling their personal finances are good or excellent, it is no surprise that consumers are continuing to cut back.”
The cutbacks consumers are making toward discretionary spending aren’t having a positive effect on consumer savings either. Forty-two percent expect to save or invest less in the month ahead, tying a Monitor high, while only 9 percent expect to save or invest more, a Monitor low.
Monitor-Low 47 Percent Expect to Have Money Left Over After Paying Monthly Bills . . .
Majority of Consumers Feel Economy, Personal Finances are Getting Worse
For the first time since February, there was an increase in the number of consumers feeling economic conditions are worsening. Fifty-two percent feel economic conditions are deteriorating. This is the highest this number has been since March.
An increasing number of consumers also are concerned over the direction of their personal finances. Fifty-one percent feel their finances are getting worse, a 2-point increase from June and also the highest this number has been since March.
“The optimism consumers showed about the economy during the spring has faded during the summer,” said Loeger. “Unemployment is still rising and while some are saying the worst is over, the majority of consumers surveyed by the Monitor in July currently don’t feel that way. Until they do, consumers are unlikely to start spending again.”
This report is consistent with Gallup's poll (www.gallup.com) showing that average spending by consumers over the past 14 days (rolling average) is near its lows for this economic cycle.
Copyright (C) Long Lake LLC 2009
Thursday, July 9, 2009
Another Negative Economic Poll You Probably Never Heard Of
From Rasmussen Reports is more evidence of withering green shoots, in Discover (R) Consumer Spending Monitor (SM):
The Discover U.S. Spending Monitor fell for the first time in four months from 86.2 to 85.6 (based out of 100), as consumer attitudes toward the economy reversed course from the previous three months with more consumers expressing concern over the current state of the U.S. economy. Overall, 59 percent rated current economic conditions as poor, a 4-point increase from the previous month and the first increase since February.
Consumers, seeing higher prices for gasoline and other necessities, responded to the effect that discretionary purchases are going to decline:
To adjust for an increase in household expenses, consumers planned cutbacks on discretionary purchases like going out to dinner or the movies. Over half, 51 percent, plan to spend less in the month ahead on discretionary purchases, a 2-point increase from the previous month. Half of consumers are also expecting to spend less on home improvement purchases, the same as last month, and 48 percent of consumers said they’ll be spending less on major personal purchases like a vacation, also the same as last month. Even consumer savings wasn’t immune to possible cutbacks, as 40 percent of consumers planned on saving and investing less in the month ahead, a 2-point increase from the previous month.
It's getting near the Ides of July. We've been at this economic slog a long, long time. It's getting boring reporting on the same old stuff. But facts are facts.
Copyright (C) Long Lake LLC 2009
The Discover U.S. Spending Monitor fell for the first time in four months from 86.2 to 85.6 (based out of 100), as consumer attitudes toward the economy reversed course from the previous three months with more consumers expressing concern over the current state of the U.S. economy. Overall, 59 percent rated current economic conditions as poor, a 4-point increase from the previous month and the first increase since February.
Consumers, seeing higher prices for gasoline and other necessities, responded to the effect that discretionary purchases are going to decline:
To adjust for an increase in household expenses, consumers planned cutbacks on discretionary purchases like going out to dinner or the movies. Over half, 51 percent, plan to spend less in the month ahead on discretionary purchases, a 2-point increase from the previous month. Half of consumers are also expecting to spend less on home improvement purchases, the same as last month, and 48 percent of consumers said they’ll be spending less on major personal purchases like a vacation, also the same as last month. Even consumer savings wasn’t immune to possible cutbacks, as 40 percent of consumers planned on saving and investing less in the month ahead, a 2-point increase from the previous month.
It's getting near the Ides of July. We've been at this economic slog a long, long time. It's getting boring reporting on the same old stuff. But facts are facts.
Copyright (C) Long Lake LLC 2009
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