Let's talk about an absolute collapse of consumer confidence.... - Belle of the Ranch

[TexasTowelie]

Well, howdy there Internet people. It's Belle again. So, today we're going to talk about an absolute collapse of consumer confidence.

The administration can keep saying the economy is doing great. He can keep saying it's a Golden Age, but based on The Conference Board's latest report, American consumers are absolutely not buying what he says. Americans certainly don't feel like they're in a Golden Age and in fact, the public expects it to get even worse.

Chief economist Dana M. Peterson at The Conference Board described it by saying, "Confidence collapsed in January, as consumer concerns about both the present situation and expectations for the future deepened.” All five components of the index deteriorated, driving the overall index to its lowest level since May 2014. The drop occurred across political affiliations with the independents taking the biggest nose dive.

The expectations index, which measures how consumers feel about the near-term future, fell by 9½ points to 65.1. Reminder that anything below 80 is usually taken as a warning sign of a recession. The economy has been below 80 for 12 consecutive months. Weird. I wonder what might have shaken people's faith in the economy 12 months ago? I'm sure there's something. Just can't put my finger on it. Anyway, as we round out the first year of Trump's term, only 15.6% of consumers expected business conditions to improve in the next 6 months.

So, what does all of this mean for the economy over the next 6 months or so? Well, all of this would normally indicate that we'd see less consumer spending and an even weaker economy, but again, things are a little detached from the norms right now. The Christmas shopping season helped push spending up at the end of last year, but now we're into tax refund season, so we may see some splurging related to that. But I'm not sure what Trump expects to power the spending beyond April.

Trump can continue to say everything is great, but the responses had elevated mentions of inflation to include gas and grocery prices. Mentions of health insurance rose. I can't imagine why? And mentions of tariffs and trade, politics, and the labor market all went up.

This report is a red flag for the economy, but it's also a red flag for the idea that the GOP is going to be able to run on the economy and affordability in the midterms. The economy isn't like scapegoating demographics that middle America never meets. They see the economy every day. They pay their bills. They know Trump's claims aren't reality.

Trump is out there touting his achievements constantly, but it certainly doesn't seem like anybody is actually experiencing his Golden Age, except for his close friends and billionaire buddies. Republicans in Congress are going to have to make their decision soon about whether or not to continue to try to ride Trump's ever shrinking coattails.

Anyway, it's just a thought. Y'all have a good day.