Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

High Consumer Confidence Shouldn’t Make Us Confident

  by    0   0

Apparently, the American consumer has bought into the notion that everything is great in the economy. Consumer confidence surged to an 18-year high this month and is close to the all-time record.

The Conference Board Consumer Confidence Index jumped to 138.4, up from 134.7. Analysts expected a dip.

It was the best reading since September 2000, bringing the index close to the all-time high of 144.7 reached that same year.

The mainstream touted soaring consumer confidence as another sign of a booming economy. But it’s not clear that consumer sentiment is a good gage of actual economic conditions. It often has more to do with perception than reality. You do remember what else happened in 2000, don’t you? The dot-com bubble burst.

As we pointed out in a recent article, there are certainly a lot of things that look really good right now. But there is a rotten underbelly to this booming economy. Your average consumers don’t hear about the dark side. They’re bombarded with the same message every day. Everything is great. No wonder they think everything is great.

ZeroHedge dug a little deeper into the consumer confidence numbers and found some more troubling signs.

In the first place, while consumers are giddy about their economic prospects, they’re not so confident that their incomes are going to grow in the near future. The number of people expecting income growth fell the most since April 2017.

Regarding their short-term income prospects, the percentage of consumers expecting an improvement declined from 25.4% to 22.6%, but the proportion expecting a decrease declined marginally, from 6.9% to 6.5%.”

In fact, the gap between “present situation” and “expectation” has widened to what ZeroHedge calls “historically concerning levels.” This kind of gap generally precedes recessions, as the following chart shows.

ZeroHedge pointed out one final dichotomy. Americans are not saving. Historically high consumer confidence combined with low savings rates have been, as ZeroHedge put it, “an ominous precursor for the stock market.”

The bottom line is all of this talk about high consumer confidence should not necessarily make us confident.

Bitcoin buy gold from SchiffGold

Get Peter Schiff’s most important Gold headlines once per week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!


Related Posts

Silver Investment Demand Nearly Triples Through First Three Quarters of 2020

Holdings of silver in silver-backed Exchange-Trade Products (ETPs) rose by 297 million ounces through the first three quarters of 2020, according to data released by the Silver Institute. That’s nearly triple the level of silver inflows seen during the same period in 2019. Meanwhile, investors also had a strong appetite for silver bullion coins and […]

READ MORE →

Why Do We Put So Much Faith in Central Bankers?

Well-known management consultant Peter Drucker perfectly described the predicament faced by central bankers. You can’t manage what you can’t measure.” So why do we put so much faith in central bankers?

READ MORE →

2020 Budget Deficit Comes In at a Cool $3.13 Trillion

The fiscal 2020 budget shortfall totaled $3.13 trillion as Uncle Sam added another $124.6 billion to the deficit in September, according to the latest Monthly Treasury Statement. That more than doubles the previous record deficit of $1.4 trillion set in 2009 at the height of the Great Recession.

READ MORE →

“Temporary” Layoffs Turning Into Permanent Job Losses

When governments across the US forced businesses to close down in response to the coronavirus pandemic, everybody assumed the layoffs would be temporary. Despite the huge surge in unemployment, the expectation was people would quickly return to work once the crisis passed and the economy opened up again. But as the pandemic stretches into its […]

READ MORE →

Goldman Sachs: Dump Dollars and Buy Silver

Sell dollars and buy silver. That’s Goldman Sachs’ recommendation. Peter Schiff has been warning about a dollar collapse and now the mainstream is even getting bearish on the dollar.

READ MORE →

Comments are closed.

Call Now