Tuesday, January 27, 2009

Bernanke's Shadow: The Very Curious Consumer Confidence Numbers

The January consumer confidence index fell to 37.7 from an upwardly revised 38.6 in December.

When such areas as consumer "views" on the overall economy are concerned the numbers are decidedly lower. This should not come as a surprise given the gloom promoted by President Obama and MSM. However, the numbers, which are more reflective of specific experiences facing consumers, are starting to tick up.

For example, consumers' view of current conditions worsened slightly in January, with those saying business conditions are "bad" rising to 47.9% from 45.8%. However, the proportion of those saying jobs are "plentiful" rose to 7.2% from 6.5%, while those saying jobs are "hard to get" fell to 41.1% from 41.5%. The percentage of respondents with plans to buy an automobile within six months rose to 5.3% in January from 4.8% in December.

There's still significant fear, especially in housing related sectors. Those with plans to buy a home fell to 2.5% from 2.6%, while those with plans to buy major appliances fell to 23.2% from 27.1%.

But, the optimism in the employment sector may indicate that Bernanke's money printing is resulting in more job offers. Further, the rise in those planning to buy cars is an indication of confidence by those holding jobs.

It's still much too early to call any kind of turn in the economy, but these upticks may truly be reflective of Bernanke's shadow hovering over the economy.

Again, I want to emphasise that because of Fed money printing, a lot of traditional pieces of economic data will turn positive. However, the deeper situation is one of looming inflation, a crashing dollar and much higher interest rates.

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