Consumers finally have figured out that the U.S. economy is getting ready to turn down. Confidence fell sharply and unexpectedly in May. The Conference Board’s index fell from 68.7 in April to 64.9 in May.
Economists had predicted a rise. Instead, confidence fell to a five-month low. There was no warning. It caught forecasters flat-footed.
Europe is heading into recession. China is growing slowly. Its real estate markets have moved negative. Nowhere is there any indication of strong growth.
Consumers took months to catch on, but at long last, they have.
The job market is flat. Unemployment remains high.
Pessimism is deep. Of those surveyed, 13.6% said that business conditions are good. A mere 7.9% said the job market is providing a lot of jobs
Will conditions pick up in 6 months? Only 16.6% said yes. These readings were the lowest in 2012.
“The softening in [consumer confidence] suggests that the pace of economic growth in the months ahead may moderate,” said Lynn Franco, the director of economic indicators at The Conference Board. Moderate? Moderate from what? Economic growth has been the worst on record for a post-recession recover.
Stock prices have spooked investors. So has bad news from Europe.
Consumers watch the headlines. The economic headlines have been pessimistic for months. Consumers are finally catching on.