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

CPI Housing Cost Calculation Hides True Extent of Inflation

The government CPI data for August came in slightly under expectations. Nevertheless, a 0.3% month-on-month increase in prices is significant. And a dig into the numbers reveals something wonky. The way the government calculates housing costs drastically understates rising prices and skews overall CPI to the downside.

READ MORE →

Gold’s Growing Role in Healthcare

A couple of years ago, CNBC commentator Jim Leventhal made a pretty astounding comment. When asked about gold, Leventhal said he had no interest in it because gold has no uses as a metal. Of course, this is nonsense. Gold has a wide range of uses in sectors ranging from jewelry to high-tech electronics. And […]

READ MORE →

Federal Budget Deficit Continues Its Relentless Upward Spiral

The US government ran a $170.64 billion budget deficit in August, pushing the total fiscal 2021 budget shortfall to $2.71 trillion with one month to go, according to the latest Monthly Treasury Statement. The mainstream media spun this as good news, noting that the August deficit was 15% lower than the $200 billion spending gap […]

READ MORE →

Incentives Matter: Unemployment Edition

Both Janet Yellen and Joe Biden insisted “enhanced” unemployment benefits weren’t incentivizing people not to work. The numbers prove them wrong.

READ MORE →

Producer Prices Surge Again in August

Producer prices came in hot again in August, charting the bigger annual gain in nearly 11 years. This indicates “transitory” inflation isn’t going away any time soon. The PPI for August rose 0.7% month-on-month. Economists were forecasting a 0.6% rise. This follows on the heels of two straight months with producer prices increasing 1.0%.

READ MORE →

Comments are closed.

Call Now