Reuters breaks out its favorite economic adverb again today, this time in its headline on consumer confidence. American consumers turned more pessimistic than forecasters predicted, which has been more or less the “unexpected” norm in economic reporting (via Ace):
U.S. consumer sentiment slipped in early February, with high unemployment expected to continue and with most looking for no gain in income or home values in the year ahead, a survey released Friday showed.
The Reuters/University of Michigan Surveys of Consumers said its preliminary index of sentiment for February was 73.7, down from 74.4 in late January but up from 56.3 a year ago. …
eThe survey’s gauge of current economic conditions was 84.1 in early February, the highest since March 2008. It was up from 81.1 in late January and above the 81.4 predicted by analysts polled by Reuters.
But the survey’s barometer of consumer expectations dipped to 66.9, down from 70.1 in late January and short of the 70.9 forecast by analysts.
Between Reuters’ panel of economic forecasters and American consumers, I think I’ll take the latter. At least we don’t continually use some version of the word “unexpected” in the reporting, as we did with Reuters earlier this week with a hint of possible trouble ahead:
U.S. wholesale inventories unexpectedly fell 0.8 percent in December, while sales rose 0.8 percent, a government report showed on Tuesday.
Analysts polled by Reuters had expected inventories to rise 0.5 percent and sales to surge 1 percent. November’s inventories rise was revised up to 1.6 percent from the previously reported 1.5 percent, and the increase in sales was revised up to 3.6 percent from 3.3 percent.
Most of the fourth-quarter GDP growth got attributed to inventory management (3.5% of the 5.7% annualized rate), thanks to a faster-than-normal restocking rate. The sudden drop in December indicates that actual production tailed off at the end of the quarter. The slower sales growth from the previous month in what should have been a very busy holiday sales season also hints at weakness coming into 2010.
Consumers appear to have sensed that better than Reuters’ analysts. They also probably learned from the White House projections on job growth this week that any economic growth this year is likely to be modest, more like running in place than moving ahead. The next year doesn’t look much better. Anyone expecting stronger consumer confidence in the face of these numbers probably needs to rethink their assumptions.