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

The Economy Is Great? American Consumers Aren’t Buying It

  by    0   1

Every time the folks at the Federal Reserve talk about the “Powell Pause,” they assure us that the US economy is still strong. The president assures us that the US economy is still strong. The pundits on the financial news networks assure us that the US economy is still strong. But the US consumer doesn’t seem to be buying it.

US consumer confidence declined for the fourth month out of five in February, surprising economists who expected an increase in optimism.

The Conference Board’s consumer confidence index fell from 131.4 to 124.1. This missed every economist’s estimate in a Bloomberg survey. They were expecting a rise to 132.5. Meanwhile, consumers’ views on the present situation fell to the lowest level in almost a year, and the expectations index weakened as well.

The consumer confidence numbers come even as a major recession warning sign is flashing. Last week, the yield curve inverted. The yield on 10-year Treasurys fell below the yield on 3-year bonds for the first time since 2007 – the cusp of the Great Recession.

Peter Schiff has been saying a recession is a done deal for quite some time. Economist Marc Faber says we’re probably already in a recession. Perhaps American consumers are figuring it out. As Bloomberg put it “dimmer assessments of present conditions suggest that weak first-quarter growth and slower job gains in February are weighing on attitudes and potentially spending.”

According to Bloomberg, the weak February jobs report likely shook consumer confidence. The economy added just 20,000 jobs last month. There are also concerns about rising gasoline prices “leaving Americans with less power to spend on other goods and services.”

There are other gloomy numbers out there that we’ve reported, including rising wholesale inventories, high levels of consumer debt, and skyrocketing federal budget deficits.

Interestingly, the economists Bloomberg quoted tried to slap some lipstick on the pig, saying that consumers are overreacting.

“While economic conditions are likely to moderate this year –- meaning we’ve passed peak confidence for the cycle — this month’s slump is too severe when measured against underlying conditions.”

This underscores a point Peter made in his podcast earlier this week. The markets and the pundits still haven’t caught on to what’s going on. The Fed is giving us every signal we need. It has done a complete 180 on monetary policy. But it’s not telling the truth about why. It’s making excuses. It’s talking about a global slowdown and muted inflation. The truth is given the enormity of these deficits and the ever-upward spiraling debt, the Fed has no choice but to call off the tightening. You can’t raise interest rates in an economy built on piles of debt. But the Fed can’t tell the markets that, and at this point, the markets haven’t figured it out. Peter said they don’t really want to.

They don’t want to admit I was right from the beginning – that the Fed checked us into a monetary roach motel and there’s no way to ever check out. But I do believe the markets are going to figure this out, whether the Fed admits it or not – during the next recession.”

The recent drop in consumer confidence indicates the American public might just be a step ahead of the markets.

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

Top Slovak Party Leader Wants the Country to Bring Its Gold Home

A top Slovak political party official said his country should bring its gold home because even its allies cannot be trusted with it. Ex-Premier Robert Fico chairs the biggest party in Slovakia. Last week, he called for a special parliamentary session on the country’s gold. He said the country’s gold reserves are not safe in […]

READ MORE →

The Lurking Inflation Monster

Where’s the inflation? The Federal Reserve printed money for nearly a decade, and yet, inflation – as measured by the government – has been “muted.” What gives?

READ MORE →

Gold Set to Join the “All-Time Highs Club” — Bloomberg Intelligence

Gold is poised to join the “all-time-highs” club in the upcoming decade. No, this isn’t the musing of some gold-bug. It’s analysis from a pretty mainstream source — Bloomberg Intelligence. Stocks have set new records over the last several weeks and the dollar hit 2-year highs this fall. But writing in the commodity outlook, Bloomberg […]

READ MORE →

Recession Early Warning? Spending By the Wealthy Is Slowing

America’s economy is built on consumption. Average Americans have been pushing the US economy along, spending money they don’t have. But as we’ve reported, there are signals that the credit cards might be close to maxed out. Now there appears to be another warning sign – the wealthy are reining in their spending.

READ MORE →

Poland Brings Gold Home; Calls It a Symbol of Strength

Poland has repatriated 100 tons of gold from England. National Bank of Poland Governor Adam Glapiński announced the yellow metal’s return home on Monday. “The gold symbolizes the strength of the country,” Glapiński told reporters.

READ MORE →

Comments are closed.

Call Now