My first boss once said to me: “Watch what they do and ignore what they say.” He was referring to consumers, who despite telling pollsters that they feel rotten about the economy, spent more money than expected at the nation’s retailers last month.
Retail sales rose 1.1 percent, the largest gain in seven months, propelled by auto sales, which were up 3.6 percent. Without cars, sales increased 0.6 percent, double analysts’ forecasts. The gains occurred across a number of categories: furniture, gasoline, electronics and spending at restaurants and bars all contributed.
How can we make this data jibe with the second data point of the day, consumer sentiment? The Thomson Reuters/University of Michigan‘s preliminary reading on the overall index on consumer sentiment dropped to 57.5 in October from 59.4 in September. More sobering was consumers’ expectations, which tumbled to 47, down more than 20 points since the beginning of the year and the lowest level since May 1980.
If people feel as bad as they have felt in 30 years, why are they shopping? Because although we all are a bit freaked out by events in Europe and the slowing global economy, when it gets down to the day-to-day stuff, we somehow drown out those worries and get on with our lives.
That is, of course, if you are lucky enough to have a job. The 25 million Americans who are unemployed or under-employed,don’t have the luxury to leave their worries on the doorstep and head to the sunny side of the street. (For those too young to remember, “On the Sunny Side of the Street” was a 1930 song composed by Jimmy McHugh with lyrics by Dorothy Fields.) But some are headed to the streets in another way — through the Occupy Wall Street marches occurring across the globe.
When I wrote about OWS earlier this week, here are some of the comments I received:
• “Is no one responsible for their own well being anymore? Everyone wants to find someone else to blame?”
• “They aren’t mad. They just resent the fact they aren’t rich, but of course, they aren’t doing anything to earn their way.”
• “Pointing fingers is not going to solve anything, as Congress and this president have proven over and over.”
I know it’s easy to toss aside what seems like a rag-tag disorganized movement, but ask some of these protesters a few questions and you will find a dispirited and frustrated group of people who are struggling to participate in the economic recovery. Data released this week underscores their plight. This was the most stunning statistic that read In today’s Wall Street Journal: “From 2000 to 2010, median income in the U.S. declined 7 percent after adjusting for inflation, according to census data. That marks the worst 10-year performance in records going back to 1967.” Sadly, in the WSJ forecasting survey, economists don’t expect to see incomes recover before 2021- 10 more years!
Perhaps if more people felt like they had a chance, they wouldn’t feel so desperate and would not be seeking a repository for their financial anxieties. Before dismissing these protests, it’s worth understanding that stark economic realities provide the underpinnings to the Occupy Wall Street protests.
Jill Schlesinger is editor-at-large for CBS/Moneywatch. Listen to her Morning Report interview for more analysis of the August jobs report, and visit her CBS blog for more analysis.
Photo by Flickr User turtlemom4bacon, CC 2.0
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