Lots of gloating this morning as the Conference Board’s Consumer Confidence Index, AKA the ConCon Con, blew away Conomists expectations with a reading much higher than expected. The Con Board concludes that it means that the US consumers are in good shape and will keep spending.
While that may be true of the top 10% or, it’s not so true of the majority. The upper income strata is able to keep moving that total needle higher, but the average Joe is stuck treading water. Real retail sales (adjusted for inflation), per capita (adjusted for population growth) are lower than the were in 2007, 2006, and 2005. And they’re down from last year. Some confidence.
Meanwhile, what does the Con Con Con show?
The Consumer Confidence Index Present Conditions measure is blowing the roof off. Exactly who are the people the Con Board is interviewing? Certainly not the average consumer. They’re cutting back spending!
What else do you notice? Right! The Con Con follows the stock market. Whomever the Con Board is interviewing takes their cues from the stock market. The stock market is the Conomy!
But look at expectations. Pretty downbeat. Apparently the interviewees aren’t stupid. Certainly not as stupid as the Con Board and conomists for thinking that we buy their nonsense.
Note that as the stock market, not to mention the housing bubble, were raging higher in 2005 and 2006, CONsumer expectations were notably downbeat. Most people knew it was a con, and weren’t buying in. The same thing has been going on this time around since 2016. Most of us are just not buying in to this con, any more than we did the last one.
Meanwhile, big news on the Liquidity front. We now know how much the US Treasury expects to need to borrow for the rest of the third quarter with the suspension of the debt ceiling. Wow! It’s even WORSE then I thought, and you all know, I can be pretty pessimistic when it comes to sizing up these numbers. I’ll have a complete update and analysis of that and its likely impact on the markets coming up later this week in Liquidity Trader.
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