Consumers sure don’t feel like dancin’
TEXT OF STORY
Bob Moon: Hope you’re holding up under the pressure on this Tuesday, the 24th of June, because it’s not really hard to understand why consumers are more than a little rattled these days.
Just take a look at the gas pump for starters and then all those worrisome headlines today: Home prices keep sliding, prices everywhere else keep rising and the economy is still on the edge.
Consumer confidence has skidded to its lowest level in more than 16 years, but what’s really unsettling is the Conference Board’s monthly index of consumer sentiment was six points lower than economists expected.
What gives?
We asked Marketplace’s Nancy Marshall Genzer to find out why we consumers are singing the blues.
Nancy Marshall Genzer: Even in downtown Washington, just blocks from the White House, consumers feel insecure. Take engineer Peggy Vaneepoel and paralegal Dean Yorgey:
Peggy Vaneepoel: The prices are going up on everything while the economy is doing poorly.
Dean Yorgey: Gasoline causes higher prices for everything else… the food and people losing their jobs over it — it’s really sad.
Yorgey and Vaneepoel are both cutting back on their spending, purging their budgets of non-essentials and unnecessary travel.
Everybody’s worried about gas prices. They hear about investment banks’ troubles. Home equity loans are just a pleasant memory. Unemployment is over 5 percent. But hey, it was worse in the 70s, and we had disco music on top of everything else…
William Hummer: We had an impeachment, a very deep recession, and yet I don’t think the consumer sentiment readings were much worse then than they are now.
That’s William Hummer, chief economist at Wayne Hummer Investments. He says we don’t have 70s-style inflation or unemployment now, so why do we feel so bad? The usual suspect: the media.
[Clip from CNBC]: What’s going to make or break the markets today? We’ll be back.
Jonathan Basile is a Credit Suisse economist.
Jonathan Basile: And there are many more outlets for financial news and I think the general public is more aware of it and can feel worse about it, especially when the news gets worse.
Basile says it’ll take a few years for consumers to start feeling better. But at least in the meantime, we don’t have to listen to disco music.
In Washington, I’m Nancy Marshall Genzer for Marketplace.
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