A key reading on consumer confidence plunged in August, to its lowest level since April 2009. The Conference Board, a New York-based business research group, said its Consumer Confidence Index for August fell to 44.5, down from 59.2 in July. . . .
According to the latest index, consumers grew more pessimistic not only about the present-day economy, but also about their future prospects.
The so-called Expectations Index took a 23-point dive, falling to 51.9 from 74.9 in July. It marked the largest point drop since the Great Recession’s heyday.
About 49% of consumers said jobs were “hard to get.” Only 11.8% said they expect business conditions to improve over the next six months, and 24.6% said they expect conditions to worsen.
There is no way to sugarcoat this. The expectation of rotten times ahead colors purchasing and hiring decisions, leading to a further contraction of the economy. Low confidence begets low growth which in turn begets low confidence.
The president and the Democrats keep promising more spending and taxing. But that’s not a recipe to improve the outlook of investors, consumers and employers. Obama’s half-hearted regulatory reform and the threat of even more regulations as well as tax hikes may serve some agenda that pleases a segment of the electorate, but it does not promote growth.
The trap for many conservatives is to likewise fall into the habit of talking exclusively about budgets, debt and government spending. The missing element is growth. What should government be doing (or not doing) to promote the private sector job creation and bolster confidence? I don’t think Obama has a clue. Maybe one of the GOP presidential contenders has some ideas.