Consumer Confidence Plunges

Prof. Hamilton notes that Consumer Confidence has dropped to its lowest point in13 years. This is significant in that Consumer Confidence is a leading economic indicator. A drop in leading indicators usually point to a coming recession.

FILED UNDER: Economics and Business
Steve Verdon
About Steve Verdon
Steve has a B.A. in Economics from the University of California, Los Angeles and attended graduate school at The George Washington University, leaving school shortly before staring work on his dissertation when his first child was born. He works in the energy industry and prior to that worked at the Bureau of Labor Statistics in the Division of Price Index and Number Research. He joined the staff at OTB in November 2004.


  1. Herb says:

    About two weeks ago, I made a comment here on OTB that in my part of the country, people are talking about where they will cut back on their budgets in order to compensate for the high price of gasoline. Today, that feeling is stronger than ever. People have their sights set on a much smaller Christmas Holiday season. If the gasoline prices are not reduced significantly, Then I see a recession coming sooner rather than later.

    I have said this many many times. (One can mess with anyone and usually get away with it, but, when you mess with their pocketbook, then there is hell to pay)

    If the oil companies don’t get their prices in line, then the people will take it out on someone, and that someone will be the retail merchants, because they can’t get to the oil companies to make them pay for their anger.

    The American people have a very long lasting love for their automobiles and when you take that away from them or make it to expensive for them, they feel like a big part of their freedom has been taken from them.

    I think that the economist that said the down consumer confidence trend is because of Katrina is dead wrong. After Katrina hit, Most every American made a donation in some form or another and were happy to do it. People will and would gladly sacrifice a tankful of gasoline in order to help someone else, But when they feel that the high gasoline price takes that tankful of gasoline from them, thats stealing from their pocketbook and freedom.

  2. anjin-san says:

    Can’t get myself to feel too sorry for people who bought gas sucking SUV’s without regard to the damage they do to the enviorment.

  3. Boyd says:

    I can’t speak for other gas sucking SUV owners, but I don’t want your pity anyway. In fact, I think you’re actually talking about whining gas sucking SUV owners.

    And no, I don’t feel sorry for them, either.

  4. McGehee says:

    I need a big heavy truck for the day I finally can’t avoid getting t-boned by a moron in a hybrid who’s too busy yapping on his cellphone to notice his light is red.

  5. Herb says:

    The so called “gas sucking SUV owners have nothing to do with the price of gasoline. Gasoline prices affect everyone and that has created the reduced consumer spending that has shown up in the report. In fact, environmental requirements has had its effect as well with the various gasoline blends that are used in various states thereby causing increased prices, and the fact that refinery’s have not been built in the past 25 years because of environmental requirements. Right now, it takes 10 to 15 years to build a refinery because of environmental requirements. So, Yes, the environmentalist have had an effect on gasoline, and, we now see those effects with high prices and a looming recession.
    So, I guess one could say that the environmentalist have had an effect on our economy and a recession, caused by the environmentalist, in now staring everyone right in the face. So you see, SUV’s have little to do with a looming recession, It’s the stupid environmental regulations that have and will cause a recession. Hope they are happy now that they finally put their own personal values ahead of everyone else for a cause that has all the possibilities of an economic disaster to satisfy their own egos and self centered, misguided, ideas.

  6. odograph says:

    Ah, I think the “yuppies” are more likely to be barreling at you in a freshly waxed Hummer H2(*), while talking on their cell phones. I live near Yuppieville, I know.

    * – which has never been off-road

  7. bryan says:

    Hey, a good reason for the fed to raise rates again! and sock it to the consumer confidence index some more!

  8. Herb says:

    Obviously there those who drive around in flimsy built plastic cars that are to cheap to offer themselves and their family members the crash protection an SUV offers. When I hear about these cheapos, I have little pity for them when they end up in the hospital with major injuries mostly caused by their mini cars that are, as Ralph Nader says are, “unsafe at any speed”. I do however feel a lot of pity for their family members who are injured because someone put environmental issues ahead of their family’s safety.

  9. odograph says:

    Isn’t the environment a family issue? I think it’s sad that I take my newphews fishing, and then have to say “sorry, we can’t eat that.”

    When I was a kid we could go surf fishing in California and eat the catch without looking up the species in the Fish and Game “safety” list. And back then, “safe” didn’t mean that you could eat X ounces a month without immediate harm.

    I am (soundbite but true) a lifelong conservative and Republican, but it shocks me how much LIFE the conservative line is willing to give up these days in order to preserve ideological puritiy.