Consumer sentiment takes surprising dip

[villager]

("surprising" for who?)

Consumer sentiment takes surprising dip

U. of Michigan survey falls far short of forecasts, hurt by concerns about unemployment and inflation.

February 16 2007

NEW YORK (Reuters) -- U.S. consumer sentiment slipped unexpectedly in February, as concerns over unemployment and inflation led to a retreat from January's rise to a two-year high, a survey showed Friday.

The Reuters/University of Michigan Surveys of Consumers said its preliminary February consumer sentiment index declined to 93.3 from 96.9 in January.

Analysts on average had predicted that February's reading would edge up to 97.0 but the actual result was below their lowest forecast, which was 93.5. The January reading was the highest since December 2004.

Confidence took a hit from "concerns about potential increases in unemployment, especially among lower income households and among residents of the Midwest," a statement accompanying the survey said.

Recently elevated levels of inflation also took a toll. "The erosion of wage gains due to persistently high inflation was mentioned by half of all lower income households, twice the frequency recorded among households with incomes above the median," it added.

<snip>

http://money.cnn.com/2007/02/16/news/economy/michigan_sentiment.reut/index.htm?postversion=2007021611

[tridim]

1. But Boosh tells us the economy is strong and inflation is low

What gives?

Seriously, how is all this fake economic data going to affect interest rates? I'm a few months away from a refinance and am very scared.

[no_hypocrisy]

2. Self-defeating actions will eventually have its effect on the economy.

You're a CEO. You have too many workers who are paid too much money. Shed them and either work with a lighter employee base or hire replacements at "much more reasonable" salaries. The ex-workers are the fuel of the engine that runs this economy. Because the economy is no longer based on agriculture or manufacturing or even high tech jobs, the only thing keeping it going is the promise of perpetual consumption. But what about those workers that were just laid off and have little prospect of a replacement position? Take away the ability to either buy in cash or with credit, and inventory starts to pile up. Less profits, sometimes radically less profits. Now, what do you do as the CEO? You have as much chance of turning around the economy that you created as you have in stopping the waves of the ocean from hitting the shore. Congrats and enjoy your stock options while you've got them.

[villager]

3. that must be why I'm starting to grow vegetables in the backyard again....

And yes, the economy is solely a shell game now....

[twilight_sailing]

5. Having lived through

too many ups and downs, I'm old, I agree with you. Been there, done that.

[Double T]

7. Most of 'US' will be forced to return to a subsistence agrarian culture......

in part. Regression continues.

[RaleighNCDUer]

4. "what do you do as the CEO?"

Give yourself a 50 million dollar golden parachute and take a permanent vacation to St Croix.

[villager]

6. right -- leave the "rubble and rabble" behind....

...until it/they catches up with them....

[Doondoo]

8. kick

[Acadia Blue]

9. If you are a member of the "investor" class the economy is great.

[villager]

10. as if the Civil War had never been fought -- life's good if you're an "owner..."

n/t

[Cobalt-60]

11. Dip?

This consumer's sentiment is grounded and locked!
I am plagued by stagnant wages and sharply rising prices for the staples that consume most of my income. So I'm not likely to be buying any costly luxury items that take years to pay off.
Indeed, if the typical life of a career choice is 5 years with a long period of unemployment, underemployment and deep poverty guaranteed before acquiring gainful employment again, I'd be a damned fool to finance anything.
Sustained gainful employment comes first, before consumption.

[sutz12]

12. Methinks some people got their heating bills. nt

[struggle4progress]

13. Soup-rise! Soup-rise! Econ 101: Them wage-slaves is also the consumers.