Are we there yet?
Economists and journalists continue to speak and report in ways that reveal a longing for the Instant Gratification Age that got so many in trouble, the unsustainable purchasing that supposedly represented “confident” consumer spending, but must have something to do with the enormous amount of credit card debt and bankruptcies weighing on so many people today.
What we need is the big picture. Instead we get Twitter-like updates on every burp of the economy. With such micro-vision, good news such as “New U.S. home sales rise for third straight month,” is reported one day, followed immediately by a story telling us “Consumer confidence falls further in July.”
And there was that stock market rally, which was doing fine, until the “Consumer confidence falls further in July” report, causing the Dow Jones industrial average to fall 93 points, despite the better-than-expected earnings reports from companies across almost every industry, which ignited the rally. Made-up things (sorry, analytical economic formulas) such as the New York-based Conference Board’s Consumer Confidence Index, which shows confidence fell to 46.6 from 49.3 in June, for some reason are taken more seriously than real things, such as people buying houses.
But the economy watchers worry, or they would be out of a job. “Consumer spending” accounts for more than 70 percent of economic activity, and so consumers must spend more to spark the economy, economists say.
Mark Vitner, senior economist at Wells Fargo, told AP: “Consumers are not in the position to step up their spending in a major way. This doesn’t bode well for the back-to-school season.”
Ah, the well known back-to-school shopping season, which segues into the “holiday season,” from October to December. If our economy really is dependent upon expensive dorm interior decorating and Christmas presents, there is a good reason we are in a recession.
But not to fret. Despite the Present Situation Index, life, and the economy, will go on. Or not. But our confidence is up, upon discovering that the Conference Board has a Present Situation Index, which of course measures the present situation. We can check at any given moment, the present situation. Which brings us back to the Tweeting of the economy, which isn’t really helpful. Give us a report at the end of the year, during “present return season.”
The Present Situation Index, and the economy, reminds us of the Vin Scully quote, repeated often on EPSN: “Andre Dawson has a bruised knee and is listed as day-to-day (pause). Aren’t we all?”