After two years of recession and skyrocketing unemployment, the American consumer has begun to feel a return of pre-recession optimism, according to a new survey by Rasmussen. In the past week, consumer confidence has shot up eight points to hit a level not seen since February 2008, two months after the recession had begun but well before it turned into an economic collapse. However, the optimism still seems limited:
The Rasmussen Consumer Index, which measures the economic confidence of consumers on a daily basis, jumped six points on Thursday to its highest level since Feb. 5, 2008. At 91.1, the Consumer Index is up eight points over the past week, up nine points from a month ago, and up 17 points from a year ago.
Nationally, 35% of Adults say U.S. economic conditions in the country are getting better. Thirty-eight percent (38%) say they’re getting worse.
Sixty-four percent (64%) now say that the country is in a recession. That’s down four points from yesterday and is the lowest level measured since Nov. 4, 2008.
A separate survey finds that 37% expect the economy to be stronger in a year while another 37% expect it to be weaker.
That same effect was present in the first quarter GDP numbers, which came in at a slightly disappointing 3.2% annual growth. As I noted at the time, consumer spending increased at an annualized 3.6% in 2010Q1, outpacing overall growth. While it’s not explosive enough to create massive new amounts of jobs, it appears that Americans have stopped panicking about unemployment and have adjusted to current levels of joblessness as the new norm for now.
Even at 91.1, the confidence numbers remain weak. Monthly confidence numbers peaked in the Rasmussen survey in February 2007, when it hit 119.8. Investor confidence peaked at the same time at 143.7, while last month’s 94.9 was the best in the previous 18 months. They both appear to be moving in the right direction, but not with much strength.
Tomorrow, the Bureau of Labor Statistics will publish the unemployment figures for April, which will impact the confidence numbers. Today, the Department of Labor announced the third straight week of incremental declines in initial jobless claims, but the level is still too high to be generating any net increase in jobs:
In the week ending May 1, the advance figure for seasonally adjusted initial claims was 444,000, a decrease of 7,000 from the previous week’s revised figure of 451,000. The 4-week moving average was 458,500, a decrease of 4,750 from the previous week’s revised average of 463,250.
The context for these declines can be seen in this graph of 2010’s initial jobless claims figures:
The green line is the seasonally-adjusted figure that is used for analysis. That trendline still remains almost flat for 2010, and well above the 325,000 floor that most economists see as the break-even point for net job creation. We’re losing too many jobs to make inroads among the large number of unemployed with any new jobs coming onto the market at the moment. The expectation for tomorrow should be that unemployment remains at the March level of 9.7% or very close to it, with no appreciable increase in the overall employed figures.