Consumers Believe It's Really A Recession
University of Michigan Consumer sentiment was released today with numbers that are hitting some of the lowest levels in the history of the index which extends back to 1952. While the media, Wall Street and mainstream economists still tout the current "statistical" economic recovery as the second coming the reality is that the rest of the real world, that would be the average American consumer, still thinks, and acting as if, we are in a recession.
This is obviously not good for the economy as the longer that the consumer remains entrenched the harder it will be to start creating economic growth going forward due to the virtual spiral that develops between lack of final demand from consumers causes businesses to retrench and cut production which reduces the ability of the consumer to expend, so forth and so on.
The number today was far below the lowest Wall Street prediction of 68. Again, most of the economist were expecting a much higher number between 70 and 75. How these people keep a job is absolutely beyond me.
The takeaway here is that this is the worse number since when the market pegged its low in March 2009. Remember, that was when the world was convinced that we had met our end and when Ben and Friends launched the first round of QE.
Well, maybe its a good thing the Fed's QE3 plans is being announced now before the rest of America realizes just how fast that they are being pick pocketed by higher inflation, lower wages and a declining trend of economic prosperity.