Wait a Second…Consumer Confidence Is Rising Now?

Amidst worries that consumer spending is lagging due to the credit crunch, housing slump and high energy prices, Reuters goes and releases a report saying that consumer confidence in January rose on its Surveys of Consumers index of confidence, to 80.5 from a 75.5 tally in December.

The survey, done by the news service and the University of Michigan, says consumers still have “a negative view toward their current finances and were concerned about rising inflation and unemployment.”

But a Bloomberg article on the same survey says: “Job and wage growth is helping cushion the blow from higher gasoline bills, tougher borrowing conditions and falling home values, economists said.”

This is just confusing.

Have reports about consumer doom and gloom been overblown? Or is this just a small bright spot in the bigger, gloomier picture?


3 Responses to “Wait a Second…Consumer Confidence Is Rising Now?”

  1. 1 Mike Corbitt January 23, 2008 at 11:57 am

    Yes…this is just a small light in the dark. I think if you have a job, you will do everything you can to keep it. You will tighten your belt and choose the store brand versus the name brand, go to the pool instead of Hawaii and live through the cycle like many generations before us.

    Smile… it could be a lot worse…and it may be …but still smile.

  2. 2 Brian C January 23, 2008 at 12:01 pm

    I guess we will have to wait and see. What this really boils down to is a back-to-basics mentality of doing due diligence that clearly conveys an accurate picture of the potential market in the area where the project is. We can have all the reports and the gurus telling us what’s next, but the reality is that each deal is different.

  3. 3 Clifford Sondock, President of the Land Use Institute January 23, 2008 at 12:08 pm

    A little recognized fact is that the US is highly regional. There are some regions that are more able to handle economic downturns than others.

    Moreover, each state has varying degrees of a market economy, similar to Western and Eastern Europe.

    For example, the State of Texas follows a more free market (capitalist) economic structure; while the State of New York adheres to a more government-controlled (socialist) structure.

    Those states with less regulation, lower taxes, and greater respect for property rights are more adaptable and enjoy a lower cost of living. These states appear mostly in the South, Midwest and Western regions of the US.

    California and most of the Northeast are highly government controlled economies with numerous government jurisdictions, highly restrictive property rights and burdensome land-use regulations. It is in these regions that the coming economic hardships will be most severe…Phoenix, Las Vegas and much of Florida, while most adversely affected by foreclosures caused by the sub-prime debacle, will actually weather the economic storm far better than anticipated…and, in most cases, better than regions less affected by foreclosures but more government controlled such as those in California and the Northeast.

    Of course, if the US is hit by a Category 5 hurricane, rather than a Category 1 to 3…all ships are likely to sink.

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