Brutal: Consumer confidence plunges almost 15 points in August, back to April 2009 levels

posted at 9:30 pm on August 30, 2011 by Allahpundit

No confidence.

The Conference Board Consumer Confidence Index®, which had improved slightly in July, plummeted in August. The Index now stands at 44.5 (1985=100), down from 59.2 in July. The Present Situation Index decreased to 33.3 from 35.7. The Expectations Index decreased to 51.9 from 74.9 last month…

Says Lynn Franco, Director of The Conference Board Consumer Research Center: “Consumer confidence deteriorated sharply in August, as consumers grew significantly more pessimistic about the short-term outlook. The index is now at its lowest level in more than two years (April 2009, 40.8). A contributing factor may have been the debt ceiling discussions since the decline in confidence was well underway before the S&P downgrade. Consumers’ assessment of current conditions, on the other hand, posted only a modest decline as employment conditions continue to suppress confidence.”…

Consumers’ short-term outlook deteriorated sharply in August. Those expecting business conditions to improve over the next six months decreased to 11.8 percent from 17.9 percent, while those expecting business conditions to worsen surged to 24.6 percent from 16.1 percent. Consumers were also more pessimistic about the outlook for the job market. Those anticipating more jobs in the months ahead decreased to 11.4 percent from 16.9 percent, while those expecting fewer jobs increased to 31.5 percent from 22.2 percent. The proportion of consumers anticipating an increase in their incomes declined to 14.3 percent from 15.9 percent.

There’s a glimmer of good news: More people now say that they plan to spend soon on big-ticket items like cars and major appliances, so that might be a shot in the arm for unemployment. If it’s true that the debt-ceiling standoff and S&P downgrade are weighing on confidence levels, then that effect should recede soon too. The extreme volatility on Wall Street this month also freaked people out, I’m sure, and that’s abated for now. We’re one eurozone wobble away from another panic cycle, but as long as things seem relatively stable there, I assume these numbers will rebound a bit next month — barring the arrival of the long-dreaded double dip, of course. Which may already be upon us.

Consumer confidence is the ultimate measure of how voters “feel” about the economy so it’s a natural metric to look at during primary season to see how comfortable the incumbent is. Ace has a post up noting the similarly grim new numbers from the Michigan index of consumer sentiment and the fact that the average index on election day for incumbents who lost was 74.8. (For incumbents who won reelection, it was 95.9.) The current index is … 55.7. I tried to find similar numbers for consumer confidence and came up with this list tracking the CC index for the month of October in every year dating back to 1977. The lowest it’s ever been was 38.8 in 2008, right after the financial crisis, and Obama stomped the candidate of the incumbent party in the election the next month. If you toss that number out on grounds that it followed an extraordinary economic event, the next lowest CC index in a presidential year was 1992, when it was 54.6. Again the incumbent party lost badly as Clinton ousted Bush 41. The index isn’t foolproof — in 2000 it was a stratospheric 135.8 and Gore lost to Bush anyway — but not only is O deep in the danger zone , he’s been stuck there for almost his entire presidency. You can view the monthly CC numbers for his first two and a half years here. The index finally nudged above 60 and held there during the first half of this year, but it’s declined steadily for four straight months to the point where we’re now back almost to the beginning of his presidency. Essentially, it’s the answer to the “Are you better off than you were four years ago?” question in graph form. Devastating. Not irreversible, but devastating.

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But he will be re-elected! – that stupid guy who has never predicted wrong since ’84.

carbon_footprint on August 30, 2011 at 9:31 PM

I am confident that I can’t afford to consume.
Another Downgrade.

Electrongod on August 30, 2011 at 9:32 PM

Miserable failure.

JammieWearingFool on August 30, 2011 at 9:32 PM

And if Americans re-elects this man after what he has done, they are watching too much Dancing with the Stars and we will lose this country.

carbon_footprint on August 30, 2011 at 9:32 PM

President Downgrade.

amerpundit on August 30, 2011 at 9:33 PM

Paging Mr. Lichtman.

artist on August 30, 2011 at 9:34 PM

Consumer confidence plunges almost 15 points in August, back to April 2009 levels

And alcohol sales skyrocket.

Knucklehead on August 30, 2011 at 9:35 PM

but not only is O deep in the danger zone , he’s been stuck there for almost his entire presidency.

Let there be Licht(man), and there was light.

Schadenfreude on August 30, 2011 at 9:35 PM

Chauncey the Gardener would make a better president than Obama.

Schadenfreude on August 30, 2011 at 9:35 PM

Can’t the Joint Chiefs of Staff arrest this man? He is causing more harm to American than freakin al Quaeda!

Lon Chaney on August 30, 2011 at 9:36 PM

And alcohol sales skyrocket.

Knucklehead on August 30, 2011 at 9:35 PM

Even with lower budgets every where in America. Alcohol sales are through the roof.

carbon_footprint on August 30, 2011 at 9:38 PM

Barack Obama, it may well be time for you to consider some words written a while back, by someone who I’m sure is a friend of your friend Bill Ayers.

Todd Gitlin, writing of Lyndon Johnson’s speech of 3/31/1968 announcing he would not run for re-election, said: “Nothing quite became his Presidency as his leaving it.” Or words to that effect.

Try to keep those words in mind, Mr. President…

JohnGalt23 on August 30, 2011 at 9:38 PM

Can’t the Joint Chiefs of Staff arrest this man? He is causing more harm to American than freakin al Quaeda!

Lon Chaney on August 30, 2011 at 9:36 PM

Shh, according to White House talking points, ‘al Quaeda’ should not be mentioned this close to the anniversary of 9/ 11.

carbon_footprint on August 30, 2011 at 9:39 PM

But wait, he promised laser-like focus on the economy after vacation … in 2010.

JammieWearingFool on August 30, 2011 at 9:39 PM

Still more evidence as to how dumb Barack Obama really is. I doubt that he even got 500 on the verbal SAT and probably not even 400 on the math SAT. http://www.americanthinker.com/2011/08/early_obama_letter_confirms_inability_to_write.html

Lon Chaney on August 30, 2011 at 9:40 PM

Why would anyone spend anymore than they absolutely have to? Those with money are watching and those without much can’t afford to buy much.

On another note where is crr6 these days? I’d like her to reassure me that everything is fine. I can’t take anymore good news.

arnold ziffel on August 30, 2011 at 9:43 PM

But wait, he promised laser-like focus on the economy after vacation … in 2010.

JammieWearingFool on August 30, 2011 at 9:39 PM

You must have missed it. It happened but his laser was powered by solar and wind.

Electrongod on August 30, 2011 at 9:43 PM

Unexepected!!

JimK on August 30, 2011 at 9:44 PM

Essentially, it’s the answer to the “Are you better off than you were four years ago?” question in graph form. Devastating. Not irreversible, but devastating.

crr6 would disagree. Where’s Del with the quotes from the past?

ted c on August 30, 2011 at 9:47 PM

Unprecedented!

ted c on August 30, 2011 at 9:48 PM

And if Americans re-elects this man after what he has done, they are watching too much Dancing with the Stars and we will lose this country.

carbon_footprint on August 30, 2011 at 9:32 PM

Keep the mob dumb and happy right? Television, realty TV, is the modern day coliseum! IMHO.

bluemarlin on August 30, 2011 at 9:48 PM

Count it!

Missy on August 30, 2011 at 9:49 PM

Consumer confidence swings wildly month to month. I really can’t put much stock in these numbers. All it tells me is that Americans have the attention span of a gnat and change their views on the economy every week based on what Katie Couric and Charlie Gibson is telling them.

angryed on August 30, 2011 at 9:49 PM

Chauncey the Gardener would make a better president than Obama.

Schadenfreude on August 30, 2011 at 9:35 PM

& we could tell the difference how?

tetriskid on August 30, 2011 at 9:49 PM

And alcohol sales skyrocket.

Knucklehead on August 30, 2011 at 9:35 PM

Even with lower budgets every where in America. Alcohol sales are through the roof.

carbon_footprint on August 30, 2011 at 9:38 PM

Alcohol and tobacco sales always go up in bad times!

bluemarlin on August 30, 2011 at 9:51 PM

& we could tell the difference how?

tetriskid on August 30, 2011 at 9:49 PM

Chauncey didn’t have big ears and an annoying speech pattern.

darwin-t on August 30, 2011 at 9:52 PM

Alcohol and tobacco sales always go up in bad times!

bluemarlin on August 30, 2011 at 9:51 PM

And I’m living proof.

Knucklehead on August 30, 2011 at 9:53 PM

Alcohol and tobacco sales always go up in bad times!

bluemarlin on August 30, 2011 at 9:51 PM

And I’m living proof.

Knucklehead on August 30, 2011 at 9:53 PM

Me too, cheers!

bluemarlin on August 30, 2011 at 9:53 PM

Let the games BEGIN!!

http://theiowarepublican.com/2011/tir-exclusive-palin-to-fly-to-new-hampshire-following-iowa-appearance/

GAME ON!

dforston on August 30, 2011 at 9:45 PM

And some people think she will support Perry…LOL

It’s going to be an amazing weekend..:)

idesign on August 30, 2011 at 9:53 PM

As for the survey showing people are going to buy more ticket items…

It’s seasonal. People buy houses in spring. Move in summer. Redecorate in fall. This mean new stoves, new fridges, new sinks, new bathtubs.

And lots of people wait until fall to buy a new car knowing that

a) new models come out in fall and those who want the latest will wait
b) old models are discounted and people will wait to get the better price

angryed on August 30, 2011 at 9:54 PM

Keep the mob dumb and happy right? Television, realty TV, is the modern day coliseum! IMHO.

bluemarlin on August 30, 2011 at 9:48 PM

Good point.

Alcohol and tobacco sales always go up in bad times!

bluemarlin on August 30, 2011 at 9:51 PM

And I’m living proof.

Knucklehead on August 30, 2011 at 9:53 PM

Me too, cheers!

bluemarlin on August 30, 2011 at 9:53 PM

You can add me to the sad, sad list.

carbon_footprint on August 30, 2011 at 9:56 PM

It’s Global Warming I tell ya! Just ask Al!

GarandFan on August 30, 2011 at 9:56 PM

Doesn’t matter, Obama has a plan. . .

Skandia Recluse on August 30, 2011 at 9:58 PM

Yeah, well just wait for his new job program…he is toast, and I think Hillary may just jump in to save the dems.

right2bright on August 30, 2011 at 9:58 PM

idesign on August 30, 2011 at 9:53 PM

If she doesn’t hop in this weekend, than she will just be a deal maker, and a power broker.
Her time is basically, has been up for several weeks.
She would be smart just to negotiate a deal for a cabinet position…

right2bright on August 30, 2011 at 10:01 PM

If she doesn’t hop in this weekend, than she will just be a deal maker, and a power broker.
Her time is basically, has been up for several weeks.
She would be smart just to negotiate a deal for a cabinet position…

right2bright on August 30, 2011 at 10:01 PM

Right…..

And they said she was dead after she resigned…yada, yada, yada.

idesign on August 30, 2011 at 10:07 PM

It’s almost as if a bunch of Americans woke up in early August and figured out that we have a dork Hawaiian socialist in the White House, who doesn’t have a single clue about economics or the economy and plays golf with Marxists, racists, and former street gang members.

Jaibones on August 30, 2011 at 10:08 PM

If she doesn’t hop in this weekend, than she will just be a deal maker, and a power broker.
Her time is basically, has been up for several weeks.
She would be smart just to negotiate a deal for a cabinet position…

right2bright on August 30, 2011 at 10:01 PM

Just a question for fairness sake. If it is not too late for Christie, per many people, to still jump in or say Paul Ryan who may have announced a week ago and it would have been ok or people keep talking Rudy as well etc. Why is it she is the only one who has passed her moment to announce? I understand you are still giving her until this weekend but it seems most others do not but allow others more time. Not sure that is really a good question as it is more of an observation on my part.

bluemarlin on August 30, 2011 at 10:10 PM

Let there be Licht(man), and there was light.

Schadenfreude

Very revealing! :)

honsy on August 30, 2011 at 10:12 PM

Chance the Gardner was a fount of wisdom compared to Doofus Numero Uno.

Dhuka on August 30, 2011 at 10:14 PM

The economy isn’t going to stabilize for a while. We’ve got a lot of economic data this week, and so far it’s been bad news all week. The market has shrugged the continuing bad news off, primarily because it figures that with the news getting worse and worse in the economy, the Fed Bank will have no choice but to do another round of quantitative easing. And they may be right because a vocal critic in the Fed Bank has signaled support, should the economy sink further.

During the last FOMC meeting, we learned that the number of dissenting hawks at the Fed has increased to a whopping 3. Well, make that 2 after Minneapolis Fed’s Kocherlakota just basically stuck his tail between his legs. To wit: “the disinflationary pressures of 2010 should soon reappear in the form of a sharp decline in current and expected core PCE inflation rates. In that eventuality, increasing policy accommodation might well be appropriate.” One dissenter down, two to go.

This is keeping the markets positive, as everyone’s trying to get on the ground floor for same market levitation that took place a year ago when QE2 was enacted. Ironically, however, as long as the market’s up, the Fed has a hard time justifying more easing, because they need a strong deflationary signal to do so. Which brings us to this Friday’s NFP numbers. Some are whispering that we may, in fact have a net job loss. If that happens, that could send the market sharply lower. The ADP numbers are tomorrow, and jobless claims are on Thursday. It’s going to be interesting.

Weight of Glory on August 30, 2011 at 10:21 PM

The only big ticket item I am buying is my September 15 estimated federal tax payment.

Valiant on August 30, 2011 at 10:27 PM

But he will be re-elected! – that stupid guy who has never predicted wrong since ’84.

carbon_footprint on August 30, 2011 at 9:31 PM

But did he predict those other races 14 months out?

Chip on August 30, 2011 at 10:27 PM

When is that speech? No worries, it can wait, just let us know when it is good for you.

Fuquay Steve on August 30, 2011 at 10:59 PM

But did he predict those other races 14 months out?

Chip on August 30, 2011 at 10:27 PM

I seriously doubt it.

carbon_footprint on August 30, 2011 at 11:05 PM

Thank you, President Obama!
— crr6

Washington Nearsider on August 30, 2011 at 11:59 PM

BREAKING:

Jugears looks really really pathetic.

That

is

all.

hillbillyjim on August 31, 2011 at 12:05 AM

Chauncey the Gardener would make a better president than Obama.

Schadenfreude on August 30, 2011 at 9:35 PM

So would Obama’s illegal, drunk, criminal half-uncle.

MaiDee on August 31, 2011 at 12:21 AM

It’s probably no coincidence that the indicator dropped after Obama stated one time too many that this is the worse economic situation since the Great Depression and he’ll have a plan to get us out of it after he returns from his extended vacation. That sounds much, to much, like the incompetent repairman who can’t seem to fix the problem you hired him for but is always coming up with future plans to do things he promised to do months ago.

Fred 2 on August 31, 2011 at 12:40 AM

carbon_footprint on August 30, 2011 at 9:38 PM

But it’s only for medicinal purposes I tell you.

chemman on August 31, 2011 at 1:11 AM

Unfortunately for the economy, people’s plans to spend on cars – and the lift auto spending has given in the last month or so – reflects a fair amount of pent-up demand.

Supplies and availability for many popular Japanese models were interrupted by the tsunami, for one thing. Another factor is that people who put off buying things like cars because of the economy often cannot hold out forever. Their old car may be deteriorating or no longer meet family needs, for example.

Appliances are similar. You can put off buying a new stove, refrigerator, washer, or dryer as long as the old ones are working or can be reasonably repaired, but these things aren’t designed to work forever.

With confidence plunging, pent-up demand is the most logical explanation for increased sales or plans to buy bigger ticket items.

Adjoran on August 31, 2011 at 2:51 AM

IMPEACH OBAMA!!

Sherman1864 on August 31, 2011 at 5:50 AM

Consumers? What consumers? Increase in income? Ha. It is to laugh. It’s OK though. There’s going to be a speech.

curved space on August 31, 2011 at 6:07 AM

Miserable failure.

JammieWearingFool on August 30, 2011 at 9:32 PM

Family-friendly version of SCOAMF.

Extrafishy on August 31, 2011 at 6:28 AM

Right…..

And they said she was dead after she resigned…yada, yada, yada.

idesign on August 30, 2011 at 10:07 PM

I’m neutral as to her potential run. That said, having worked on the staff of a sitting US Congressman and eying this strictly from a logistical standpoint, not having the infrastructure in place in key states at this point tells me she’s got a nearly impossible hurdle to navigate or she probably isn’t running. Since she seems a savvy politician, I suspect it to be the latter not the former.

Alden Pyle on August 31, 2011 at 6:54 AM

Firearms sales continue to be very strong and they ARE a durable good!

As for the other durable goods expect the pattern for replacement to be… repair what you have, buy used, buy highly discounted models, buy at close-out sales from places going out of business, buy ultra-low end as cheap as you can get, buy on e-bay from overseas dealers that include shipping in the product cost… make do without.

The high end, high profit items? Lotsa luck there unless you are rich… and if you used to be able to afford it in 2006 and can’t now, you are not going to re-vote for any of the idiots Upon the Hill regardless of party. While people may not like the Tea Party message of living within your means, pay off your debts, save when you can, put away for a rainy day, put off until tomorrow what you really don’t need today… yeah that will always get high negatives. Common sense does until you are forced to use it by politicians. Then when you get a clue you look to vote out those without one. The cluebats were handed out in 2010. Expect more of them to start being distributed amongst the population at large while the Left denies that anything is wrong until THEY start to get put out of jobs from elite institutions.

If you want real change, then it is time to bring the pain of this economy home to the government and start putting large sections of it out of work so that the people can get breathing space to exercise their liberty and freedom. We are now in the school of hard knocks phase… help your fellow countrymen through it and hand them a cluebat, wouldya? We need more cluebat wielders now.

ajacksonian on August 31, 2011 at 7:29 AM

Paging Mr. Lichtman.

artist on August 30, 2011 at 9:34 PM

His points were weighted to produce the outcome he wanted. We humans are wonderful. We can convince ourselves of anything.

SKYFOX on August 31, 2011 at 7:31 AM