Tag Archive for Consumer Confidence

The shutdown and the economy – Sober Look

The US federal government impasse is clearly having a material impact on the economy. But the impact is both direct (government employees and businesses that are impacted) and indirect from the impact on the American consumer. Here is part what the direct impact looks like:

Yahoo/Finance: – If there was any confusion about what part of the economy is working and what part is broken, the political antics of the last week have definitively cleared that up.

The shutdown of the federal government represents both a direct setback for the economy and a symbolic arrow pointing to one of the economy’s weakest sectors. Economic forecasting firm IHS Global Insight estimates that every week the government remains shuttered will reduce GDP by $1.6 billion. That’s not a huge hit in the grand scheme of things, but the economy is weak to start with, and it’s not usually considered prudent to trip a limping patient.

The furlough of as many as 800,000 federal employees—punctuated by the government’s failure to publish the monthly jobs report for September on schedule, due to the shutdown–will further weaken a sector that’s already detracting from employment.

The indirect impact however is harder to quantify, but if the situation is not resolved soon, it will overshadow the direct impact. One can see what it’s doing to consumer confidence from some of the high frequency sentiment surveys. The Gallup Economic Confidence Index for example is at the lowest level in over a year. Those who believe that the politicians responsible for this madness are trying to help US households and small businesses should just look at the chart below.

Source: Gallup

SoberLook.com

From our sponsor:

www.SoberLook.com

4 indicators signal that US economic growth is off to a weak start for the quarter – Sober Look

This is a syndicated repost courtesy of Sober Look. To view original, click here. Reposted with permission. Those hoping for the US economy to accelerate in the second half – and many economists made that call early in the year – will be disappointed. While employment metrics seem to show steady improvements, putting the Fed…

Consumer sentiment in the US has peaked – Sober Look

This is a syndicated repost courtesy of Sober Look. To view original, click here. Reposted with permission. With a sharp rise in interest rates (see chart) and with gasoline prices still elevated after a spike this summer (see chart), it is increasingly important to track the US consumer sentiment. Given the anemic post-recession growth, additional…

Americans face more bad news at the gas pump- Sober Look

This is a syndicated repost courtesy of Sober Look. To view original, click here. Reposted with permission. As gasoline prices rise above $5/gallon in LA (see video below), analysts are puzzled. Gasoline prices have been on the rise for the past 31 days, which is highly unusual for this time of the year. Typically prices…