Tag Archives: consumers

Consumer Confidence Index Drops to Lowest Since April 2009

Indicative of a recession, the Conference Board’s consumer confidence index dropped to 44.5 vs. last months 59.2. That represents the lowest showing of consumer sentiment since spring of 2009.

The number was heavily weighed down by a very poor showing in the forward-looking Expectations Index portion of the total score. This represents

 Says Lynn Franco, Director of The Conference Board Consumer Research Center: “Consumer confidence deteriorated sharply in August, as consumers grew significantly more pessimistic about the short-term outlook. The index is now at its lowest level in more than two years (April 2009, 40.8). A contributing factor may have been the debt ceiling discussions since the decline in confidence was well underway before the S&P downgrade. Consumers’ assessment of current conditions, on the other hand, posted only a modest decline as employment conditions continue to suppress confidence.”

In a scathing rebuke of the current administration’s view that things are getting better, the report also shows that only 11.8 of respondents think that business conditions are going to improve over the next six months.

Consumer Spending Index Rises in July

NEW YORK, Aug. 12, 2011 /PRNewswire/ — Bolstered by a rise in home prices and a slight improvement in real wages, the Deloitte Consumer Spending Index rose in July for the first time since January. The Index tracks consumer cash flow as an indicator of future consumer spending.

“The housing market is showing multiple signs of stabilizing and that is helping to ease a significant drag on consumer spending,” explains Carl Steidtmann, Deloitte’s chief economist and author of the monthly Index.  “A decline in energy prices drove an increase in real wages, perhaps giving consumers more money to spend and restoring confidence despite a weak labor market and the recent debt ceiling debate.”

The Index, which comprises four components — tax burden, initial unemployment claims, real wages, and real home prices — rose to 2.53 from a reading of 2.49 in June.

“A dip in energy prices and warmer temperatures across most of the country is offering consumers reason to take advantage of back-to-school shopping promotions,” said Alison Paul, vice chairman and U.S. retail & distribution sector leader, Deloitte LLP.  “Deloitte’s back-to-school survey indicates most consumers plan to spend more or the same on back-to-school shopping; more than 60 percent say the most important factor driving buying will be price.   Many consumers are using their smart phones to research prices, and store and discount locations — the implication being that retailers will need to be sharp on prices, promotions and assortment this year.”

Highlights of the Index include:

Tax Burden: An increasing tax burden is often the sign of an improving economy and the tax burden is up to 10.7 percent of personal income from 9.6 percent a year ago. However, it is unchanged from the previous month.

Initial Unemployment Claims: After breaking down below the 400,000 barrier from October to March, claims have increased sharply and put the economic recovery at risk.  Claims are improving but remain above the 400,000 level on a monthly basis, escalating to 427,750 in July, up from a low of 389,250 in February.

Real Wages: Real wage growth rose slightly in July due to falling energy prices.  Wages are up 0.2 percent but are down 2 percent from a year ago.

Real Home Prices: Home prices are up nearly 7 percent in July, but just 3.6 percent from one year ago.  Prices have stabilized and are slowly moving back up in some locations.  The rebound in home prices pushes a previously significant growth barrier away from the consumer.

Consumer Confidence Slides for Second Straight Month

NEW YORK, Aug. 4, 2011 /PRNewswire/ – Although Congress and President Obama have agreed to raise the debt ceiling, a majority of Americans say that the debate has made them less confident in the nation’s economic recovery. More than half (54 percent) of Americans surveyed say that the debt ceiling debate has made them feel less confident in the economy, and 42 percent say that it has made them less confident in their own finances and investments, according to the August RBC Consumer Outlook Index. The RBC survey was completed immediately before the resolution of the debt ceiling negotiations.

Indicative of Americans’ concern with the state of the country, the number of Americans saying the U.S. is on the wrong track spiked in August to 76 percent, up from 63 percent last month, and the highest rate since July 2008. Only 24 percent of Americans say the country is headed in the right direction.

Confirming the nation’s restive mood, U.S. consumer confidence dropped in August for the second straight month as measured by the RBC Consumer Outlook Index. According to the Index, consumer confidence declined to 40.2 for August, down 3.5 points from the 43.7 reading in July and 6.5 points below the post-recession high of 46.7 in June.

“There is clearly a strong inclination to highlight the wrangling in Washington over the debt ceiling as having weighed heavily on confidence this month,” said RBC Capital Markets chief U.S. economist Tom Porcelli. “However, we would caution against assigning all the blame on this one aspect of the recent backdrop, which to say the least, has been disappointing. We would also highlight the jobs index and the investment index within the overall RBC Index as particularly troubling.”

Although the overall RBC Consumer Outlook Index declined, employment security remained relatively stable in August, with the Jobs Sub-Index falling only 0.8 points to stand at 52.0. While this is down from June’s high-water mark, it remains above the low point for the year. Job confidence also remains stable, as actual experience with job losses fell slightly from last month to stand at 37 percent. This remains the best score on this metric since 2008. However, 31 percent of Americans say they or someone in their household is currently worried about losing their job, up from 25 percent last month.

This month’s drop in the overall RBC Consumer Outlook Index is driven partly by a weaker Current Conditions Sub-Index, which dipped 4.5 points to 28.9, from 33.4 in July. Three out of five Americans (59 percent) say they are less comfortable making a major purchasing decision, such as a home or car, than they were six months ago, which is up from 48 percent last month.

The Investments Sub-Index dropped 4.7 points to 31.8, down from 36.3 in July. Half of Americans (52 percent) think that the next 30 days will be a bad time to invest in the stock market, up from 35 percent last month. The stock market, as represented by the Dow Jones Industrial Average, had lost almost five percent in the days leading up to the RBC survey.

The Consumer Expectations Sub-Index also declined this month to 49.4, down 3.7 points from 53.1 in July. While optimists and pessimists roughly balanced each other out for most of the year, in August, twice as many Americans expect the economy to worsen versus improve (40 percent, versus 18 percent).

After declining for two months, gas prices have reemerged as a major concern for consumers. Pump prices have risen over the last month, and the number of consumers expecting gas prices to rise in the next year has increased to 82 percent, up from 67 percent in July.

With the back-to-school spending season underway, two out of five parents (40 percent) say that they plan to reduce their spending this year because of the economy. The responses are essentially unchanged from a similar question asked a year ago, indicating that the impact of economic conditions is the same.

Consumer Reports Taste Tests the Best Cups of Joe

YONKERS, N.Y., Aug. 2, 2011 /PRNewswire-USNewswire/ — Consumer Reports brewed over 1,000 cups of coffee to deem two new champs among Colombian varietals in the latest issue available on newsstands today. Gloria Jean’s Colombian Supremo Medium Roast and Newman’s Own Organics Colombian Especial Medium Roast beat Consumer Reports top pick from the March 2009 report, Eight O’Clock Coffee. The former champ delivered less flavor than in past tests even though their slogan claims, “New Look, Same Great Taste.” While America’s best-selling brands, Folgers and Maxwell House, scored only Fair, far from perfect taste profiles.

“The new Colombian champs offered fairly complex, well-balanced flavors that our experts found stronger and fruitier than the flavors of most others we tasted,” said Gayle Williams, deputy health editor ofConsumer Reports. “Overall, the Colombian coffees we identified as the tastiest aren’t the highest priced per serving. It’s important for shoppers to know their taste preference and check our Ratings before purchasing.”

The 23 coffees Consumer Reports tested included three Colombian K-Cup products. Those products require a coffeemaker that can accommodate a K-Cup container, a type of single-serving coffee packaging. K-Cups were found to be more expensive per 6 fluid ounce serving than traditional packaged coffee and were only Good in tests — and may be best enjoyed with milk and sugar to mask the off-notes.

Consumer Reports also tested four Ethiopian whole-bean coffees, which have a taste that someone accustomed to standard blends might find unusual. Consumer Reports picks two from that group, Caribou Ethiopia Finjal Organic Medium and The Coffee Bean & Tea Leaf Ethiopia Yirgacheffe Light Roast, a CRBest Buy, had very complex, well-balanced flavors.

How to Choose

If the cost of morning java matters more than getting the ultimate taste, there’s good news. Walmart’s Great Value 100% Colombian Medium scored on par with the Starbucks Colombia Medium for a fraction of the price. It also had, for the same price per serving, a stronger, fruitier aromatic character than the Folgers and Maxwell House 100% Colombian coffees.

  • Consider your taste. Colombian, the most common varietal of coffee sold, can be fairly strong in flavor and intensity of aroma, with moderate complexity. Ethiopian tends to be more complex overall, with a fair amount of bitterness, though not enough to detract from enjoyment. The K-Cups tested, all Colombian, were generally not very complex and included more off-notes than the coffees judged Very Good.
  • Weigh freshness against convenience. Grinding coffee at home is less convenient but results in a fresher cup. K-Cups are convenient and easy to store, but Consumer Reports judged those unimpressive.
  • Choose a good coffeemaker. The Cooks CM4221, sold at JCPenney, was among the models from Consumer Reports December 2010 report that reached the 195 degrees F to 205 degrees F required to get the best from coffee beans and avoid a weak or bitter brew. At $40, it was a CRBest Buy.
  • Keep up the maintenance. The taste will suffer, if the coffee machine is not routinely cleaned, no matter what kinds of beans are used.

Consumer Confidence Index Declines Again – Second Recession Probable

NEW YORK, June 28, 2011 — The Conference Board Consumer Confidence Index continued its multi-month decline in June. After having decreased to 61.7 in May the economic index hit 58.5 this month indicating that consumers are feeling the onset of a second, or double-dip, recession.

Director of The Conference Board Consumer Research Center Lynn Franco said, “This month’s decline in consumer confidence was driven by a less favorable assessment of current conditions and continued pessimism about the short-term outlook. Consumers rated both current business and labor market conditions less favorably than in May, and fewer consumers than last month foresee conditions improving over the next six months. Inflation fears eased considerably in June, but concerns about income prospects increased. Given the combination of uneasiness about the economic outlook and future earnings, consumers are likely to continue weighing their spending decisions quite carefully.”

Consumer confidence dropped in many key areas. Their appraisal of present conditions was less favorable than in May, those claiming business conditions are “bad” increased to 38.0 percent from 37.2 percent and consumers’ assessment of the job market was also less favorable. Those stating jobs are “hard to get” rose to 43.8 percent, while those stating jobs are “plentiful” decreased to 5.2 percent.

Expectations of a recovery just around the corner have diminished. Americans expecting business conditions to improve in the next six months almost a full point to 16.4 percent and more expect that business conditions will worsen.

The index demonstrates that consumers are feeling what economists have just started to realize – a second recession may have begun in April of 2011. Manufacturing indices, actual jobless numbers, dismal workforce participation and declining consumer spending all point to a second recession.

Consumer Confidence Index Declines

NEW YORK, May 31, 2011 /PRNewswire/ — The Conference Board Consumer Confidence Index® , which had improved in April, decreased in May. The Index now stands at 60.8 (1985=100), down from 66.0 in April. The Present Situation Index decreased to 39.3 from 40.2. The Expectations Index declined to 75.2 from 83.2 last month.

The monthly Consumer Confidence Survey® , based on a probability-design random sample, is conducted for The Conference Board by The Nielsen Company, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for May’s preliminary results was May 18, 2011.

Says Lynn Franco, Director of The Conference Board Consumer Research Center: “A more pessimistic outlook is the primary reason for this month’s decline in consumer confidence. Consumers are considerably more apprehensive about future business and labor market conditions as well as their income prospects. Inflation concerns, which had eased last month, have picked up once again. On the other hand, consumers’ assessment of current conditions declined only modestly, suggesting no significant pickup or deterioration in the pace of growth.”

Consumers’ assessment of current conditions, while still mixed, was somewhat less favorable than in April. Those claiming business conditions are “good” decreased to 14.6 percent from 15.5 percent, while those claiming business conditions are “bad” increased to 37.1 percent from 35.9 percent. Consumers’ appraisal of the labor market was also less favorable than last month. Those stating jobs are “hard to get” increased to 43.9 percent from 42.4 percent, while those stating jobs are “plentiful” increased to 5.6 percent from 5.1 percent.

Consumers’ short-term outlook, which had improved marginally in April, turned pessimistic in May. The proportion of consumers expecting business conditions to improve over the next six months declined to 17.0 percent from 19.2 percent, while those anticipating business conditions will worsen increased to 15.5 percent from 14.0 percent.

Consumers were also pessimistic about the labor market outlook for the next six months. Those expecting more jobs in the months ahead declined to 15.9 percent from 17.8 percent, while those anticipating fewer jobs increased to 20.8 percent from 18.7 percent. The proportion of consumers expecting an increase in their incomes declined to 14.8 percent from 17.0 percent.

 

Economic Forecasts Too Rosy?

The last few weeks have been ripe with claims that the U.S. economy is recovering. Pointing primarily at consumer sentiment and holiday spending, analysts expected that the outlook for America could only improve from here.

Unfortunately, the numbers don’t add up:

  • Gallup’s economic confidence index is at -31, well below its 52 week low
  • February orders for U.S. durable goods dropped almost a full percentage point just after having risen an adjusted 3.6% in January
  • February existing home sales dropped to the lowest rate in decades which drove housing prices even lower.
  • Oil is still on the rise. Crude for May delivery was touching $106.00 per barrel and going up.

While the most recent report on first time unemployment filings dropped to 382,000, it is unknown how much of this is due to actual increases in hiring or job seekers just giving up.

So while the Federal Reserve may be talking up an improving economy, take it with a grain of salt – Bernanke was saying even rosier things all the way back in 2009.

“Consumer spending, which dropped sharply in the second half of last year, grew in the first quarter,” Bernanke said in congressional testimony May 5. “In coming months, households’ spending power will be boosted by the fiscal stimulus program, and we have seen some improvement in consumer sentiment.”

Who would have thought that by “months” he meant like 26 or 30 of them?

 

 

Dodd-Frank: A Nightmare On So Many Levels

Barney FrankSenators Barney Frank and Chris Dodd put together yet another progressive nightmare for our marginally free-market system. Granted the thought of those two alone in a dark corner is nausea-inducing, that’s not where I’m going. The Dodd-Frank bill, otherwise known as the “Wall Street Reform and Consumer Protection Act” neither reforms Wall Street nor protects consumers (who should really need no protection from anyone but themselves).

This is yet one more instance of self-aggrandizing, big-government bureaucracy all wound together to hopefully get another pair of party-line idiots re-elected. It’s populist in nature but elitist in execution.

Chriss DoddOne of the less analyzed provisions may very well serve to push jobs oversees – yeah, really. The problem begins in the quizzically-utilized math in the bill. Section 953(b) of this monstrous affront to free-markets:

    (A) the median of the annual total compensation of all employees of the issuer, except the chief executive officer (or any equivalent position) of the issuer;

    (B) the annual total compensation of the chief executive officer (or any equivalent position) of the issuer; and

    (C) the ratio of the amount described in subparagraph (A) to the amount described in subparagraph (B).

Basically, the average pay of all workers in a company, the wage of the CEO/President and a ratio comparing the two.

The intent of this bill is to show income inequality, which is only so great because of liberal initiatives.  Unfortunately, it will cause more inequality, but their stats will look better.

Understand the mindset of the American business leader.  If this regulation is truly enforced, the only course of action for them to take is to make sure this ratio does not end up higher than their competitors.  To do that, they will simply lay-off every single one of their lowest wage earners.  They will then outsource that work (the easiest to outsource by far) to Mexico (take a gander at what GM is doing with your bail-out money), China, or India.

This also means those companies won’t have to deal with oppressive health care mandates, ridiculous corporate taxes or whatever new populist garbage comes out of Washington.   You have nothing to worry about, heck, 1 in 6 Americans rely on the government for income as it is .. this will just add a few million more.