Late last week, the Atlanta Fed lowered their Q1 GDP expectations down for the third time in a week to .1%, yet the mainstream continues to dismiss any possibility that the economy is either moving into recession, or that it is already in one. And at the core of their propaganda is the belief that the consumer is alive and well, and spending money assumed to have been garnered from lower oil prices.
But two new polls and surveys out on April 15 show that not only is this assumption a lie, but that trust and sentiment in the economy is falling rather than growing.
According to the latest Weekly Economic Confidence poll released by Gallup, Americans’ confidence in the US economy is getting worse. The poll asks people to rate the economy as of today, and whether or not the economy as a whole is getting better or worse.
It turns out that ordinary people are not as excited about the US economy as those who are cheerleading minimum wage job creation and market levels being close to all time highs, and certainly not as excited as that group of people called each month by either the Conference Board or UMich, the two far more closely tracked confidence indicators.
In addition to Gallup’s survey, the monthly University of Michigan survey on consumer sentiment slid from 91 to 89.7, with analysts expectations figuring a one point rise over last month to 92.
It has been sheer fallacy that consumers have been better off due to lower oil prices, especially when the added costs of Obamacare have completely wiped out any modicum amount of savings they might have discovered in paying less at the pump. And when you add in data regarding the massive increases in revolving credit, and the need for sub-prime auto and home loans to stimulate spending in these industries, reality is that Americans have run out of discretionary monies to implement any new growth within the economy.
All the precursors to a new recession are already here, and many of these indicators also point to the same environment that led to the collapse of the Housing bubble nine years ago. But like with the last economic downturn, the mainstream will do everything in the power to obfuscate the situation and not report on how bad the economy actually is until we are well into negative territory once again.
BERNANKE: The pace of home sales seems likely to remain sluggish for a time, partly as a result of some tightening in lending standards, and the recent increase in mortgage interest rates. Sales should ultimately be supported by growth in income and employment, as well as by mortgage rates that, despite the recent increase, remain fairly low relative to historical norms. However, even if demand stabilizes as we expect, the pace of construction will probably fall somewhat further, as builders work down the stocks of unsold new homes. Thus, declines in residential construction will likely continue to weigh on economic growth in coming quarters, although the magnitude of the drag on growth should diminish over time. The global economy continues to be strong, supported by solid economic growth abroad. U.S. exports should expand further in coming quarters. Overall, the U.S. economy seems likely to expand at a moderate pace over the second half of 2007, with growth then strengthening a bit in 2008 to a rate close to the economy’s underlying trend.
Kenneth Schortgen Jr is a writer for Secretsofthefed.com, Examiner.com,Roguemoney.net, and To the Death Media, and hosts the popular web blog, The Daily Economist. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.