If there is a recovery going on, the public is unaware of it.
Consumer confidence took a swan dive in February to its lowest point since April, according to a monthly poll released Tuesday.
The index plunged to 46 from January’s 56.5, following several months of boosts, according to the Conference Board. The economy is stable only when the reading surpasses 90.
The New York-based nonprofit said that consumers are in a generally sour mood, due partly to pessimism about job prospects and income worries. The anxiety would likely lead to curbed spending, the board said.
The present situation index, which measures consumers’ feelings about the current environment, also tumbled. The drop to 19.4 from 25.2 hit the index’s lowest level since it reached 17.5 in February 1983.
The subtopics of this poll are bad across the board. It seems the public just doesn't buy the happy talk.
One reason for that might be because mass layoffs are increasing.
Update: Robert Oak here. Below are additional details and opinion on consumer confidence coming from me.
I find consumer confidence to be such an absurd metric. Analysts and policy makers hover over this number of perception. All are salivating over any hint that Americans will go shopping and spend, spend, spend! When layoffs happen, stocks go up and when the real economy, such as manufacturing, screams bloody murder when stabbed through the heart due to bad trade deals and offshore outsourcing, Wall Street just shrugs and of course, stock prices go up. Yet lordy, lordy does this crowd pay attention when Americans might just stop shopping, ignoring the absolute structural insanity of having an economy 70% dependent upon the great American debt plastic.
Ya know, if I take enough drugs my house could be burning down around my head and I'd be happy as a claim, using my VISA to do online shopping, laptop in hand, as firemen chuck me out the door.
With that, consumer confidence plunged for February 2010:
The Conference Board Consumer Confidence Index®, which had increased in January, declined sharply in February. The Index now stands at 46.0 (1985=100), down from 56.5 in January. The Present Situation Index decreased to 19.4 from 25.2. The Expectations Index declined to 63.8 from 77.3 last month.
The present situation index is at it's lowest levels in 27 years.
More details from the press release:
Consumers' assessment of current-day conditions soured in February. Those claiming conditions are "good" decreased to 6.2 percent from 8.5 percent, while those claiming business conditions are "bad" increased to 46.3 percent from 44.7 percent. Consumers' assessment of the labor market was also more pessimistic. Those saying jobs are "hard to get" rose to 47.7 percent from 46.5 percent, while those saying jobs are "plentiful" decreased to 3.6 percent from 4.4 percent.
Consumers' short-term outlook, which had been improving, lost considerable ground in February. The percentage of consumers anticipating an improvement in business conditions over the next six months decreased to 16.7 percent from 20.7 percent, while those anticipating conditions will worsen increased to 15.3 percent from 12.7 percent. Regarding the outlook for the labor market, the percentage of consumers expecting fewer jobs increased to 24.6 percent from 18.9 percent. Those anticipating more jobs will become available in the months ahead declined to 13.4 percent from 15.8 percent. The proportion of consumers anticipating an increase in their incomes declined to 9.5 percent from 11.0 percent.
Consumer Confidence, even though it's a perception index is used by retailers for future sales estimates as well as potential GDP growth. Consumption is a large part of GDP, and as noted, way too large 70%, of U.S. GDP.
For comparison sake, here is the University of Michigan's consumer sentiment, released last week.