Paper Economy - A US Real Estate Bubble Blog: University of Michigan Survey of Consumers July 2010

Friday, July 16, 2010

University of Michigan Survey of Consumers July 2010

Today's release of the Reuters/University of Michigan Survey of Consumers for July showed a notable decline in consumer sentiment with a reading of 66.5 remaining just 0.76% above the level seen last year and coming in at the lowest reading since August 2009.

The Index of Consumer Expectations (a component of the Index of Leading Economic Indicators) also dropped notably to 60.6, the lowest level since March 2009, and the Current Economic Conditions Index declined to 75.5.

It's important to recognize that while consumer sentiment is still higher than the panic laden trough level seen in late 2008, the current sentiment level is far lower than any level seen during the 2001 tech recession and roughly equivalent to the worst seen during the early 1990s and second dip 1982 recessions.

Labels: consumer sentiment, economy

2 Comments:

Does that mean that you're a double-dip believer ?

By Constant Learner, at 12:37 PM
Well its getting a lot more probable with each passing day.

Still, an organic double dip (i.e. not forced by the Fed as the last one was in 1982) is thought to be a very rare and unusual event.

There is no trace of one (by conventional standards) in the post ware history and even running back to to the early 1900s (skipping the Great Depression for a moment) its hard to make a clear case that two separate contractions were really directly related.

The issue is partly just definition... what really constitutes a double-dip?

I have offered an alternative view before... that I think we might be really headed for a triple dip... the tech wreck 2001 recession was the first dip, the housing bust was the second dip and whats up ahead is the third.

This is an unusual period... the 2000s were one of the weakest decades in the post war period (demonstrably the weakest for net job creation)... in many ways (most notable stocks and jobs) we have never bested the peak set in 2000 prior to the tech wreck.

So most of the 2000s was pretty weak and if it wasn't for the phony baloney housing/credit boom there would really have been not much to speak about.

Now we are digging out from that disaster but really... we are very deep in the hole.

If the economy does not roar we will not be able to get our heads above water before the next recession sets in... possibly it is already setting in now.

The point is... these are really unusual times and with each passing month, the trends look more like Japan post-1990 then they do US WWII to 2000.

We are trapped in an economy wide bear trend... weak jobs, weak stocks, deflating homes, credit contraction, run-away deficit spending and Fed Reserve insanity trying to combat it... taken as a whole, its quite a pickle.

By SoldAtTheTop, at 1:08 PM