Let's consider the latest data from the Conference Board, the source of consumer confidence and related information.
The Consumer Confidence Index now stands at 37.7. That is an historic low since it was started in 1967. Such a number shows terrible fear and pessimism about the nation's economic condition. Indirectly, it says that Americans will not use whatever money they have for discretionary spending and will spend less, where they can, for necessities, such as food and clothing.
Here are more details from the survey of 5,000 representative households.
The fraction that believes business conditions are "bad" increased to 47.9 percent in January from 45.8 percent the month before. Perhaps more significantly, those believing business conditions are "good" declined to 6.4 percent from 7.7 percent last month.
What about the job and labor market? The percentage of Americans expecting fewer jobs in the months ahead decreased to 36.7 percent from 40.6 percent, compared to those expecting more jobs that dropped to 9.4 percent from 9.8 percent. People claiming jobs are "hard to get" edged down to 41.1 percent from 41.5 percent in December. As for hard reality, those stating jobs are "plentiful" edged up to 7.2 percent from 6.5 percent, which must make you wonder where are these people living, because unemployment has risen in every state in the country..
Here is another dose of reality: The fraction of people expecting business conditions to worsen over the next six months decreased slightly to 31.1 percent from 32.9 percent, while those expecting conditions to improve remained relatively unchanged at just 13.3 percent in January, compared to 13.4 percent in December.
Not surprisingly, the fraction of consumers expecting an increase in their incomes declined to 10.0 percent from 12.7 percent. This suggests that just 10 percent of Americans may be in a spending mood. Not enough to restore our economy that depends on consumer spending, which accounts for some 70 percent of all economic activity.
So I ask you: Why is all that political ecstasy over Barack Obama not translating into consumer confidence? The logical answer is that nothing in the daily news about what the Obama administration is doing or about economic events is producing positive feelings about what is happening now and what is likely to happen in the future. Nothing that I see President Obama doing and saying suggests to me that people have any valid basis for coming out of their economic despair. All those happy faces on inauguration day have not shown up in any of the consumer confidence data. Confidence in the Obama personality has not translated into confidence in what his administration is capable of accomplishing, even with Democrats controlling Congress. Where is the change we have been waiting for? I guess it has not arrived yet. Will it come before recession turns into depression and unemployment exceeds 10 percent and more pain and suffering hits many more millions of Americans? Where is your confidence heading?