John Whitefoot: If you listen to the Wall Street analysts, January consumer confidence numbers weren’t really all that bad. The preliminary University of Michigan Consumer Confidence index came in at 80.4 versus a forecast of 83.4—and down from 82.5 in December. (Source: “Tale of two consumers continues as US consumer sentiment slips,” CNBC, January 17, 2014.)
Some attributed the blip to the polar vortex that swept through most of North America earlier in the month. The warmer winds of February are expected to pick up the disappointing slack in U.S. consumer confidence levels next month.
But I’m not so sure. Friday’s consumer confidence numbers missed expectations by the widest margin in eight years. It also marks the seventh miss in the last eight months. Throughout 2013, consumer confidence numbers only beat projected forecasts three times, which (surprise!) means Wall Street doesn’t really have its finger on the pulse of Main Street America.
What isn’t surprising is that upper-income households have increased consumer confidence, having benefited the most from strong gains in income levels, the stock market, and housing values. On the other hand, low- and middle-income households that are not heavily invested in the stock market are being weighed down by stagnant wages and embarrassingly high unemployment.
And, since there are more middle- and low-income earners than high-income earners in the U.S., and 70% of our gross domestic product (GDP) comes from consumer spending, it’s fair to say that both consumer confidence levels and the economic outlook for the majority of Americans is bleak.
It’s not as if the disappointing consumer confidence levels have come out of a vacuum. A raft of weak economic data came out late last week to suggest waning consumer confidence levels are in keeping with the general malaise about the U.S. population.
U.S. housing starts in December came in slightly above expectations but still slipped 9.8% to 999,000 on an annualized basis. The 10% slide was attributed to the winter weather. Single-unit (family) housing starts dropped to 610,000 in December; the lowest level since July 2013 and 4.8% below the revised November figure of 641,000. (Source: “New Residential Construction in December 2013,” U.S. Census Bureau, January 17, 2014.)(...)Click here to continue reading the original ETFDailyNews.com article: Gold Bugs Are Getting Quietly Bullish [SPDR Gold Trust (ETF), Market Vectors Junior Gold Miners ETF]You are viewing an abbreviated republication of ETF Daily News content. You can find full ETF Daily News articles on (www.etfdailynews.com)
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