Consumer confidence falls to ten-year low

Earlier today, John reported some grim polls for Democrats. There’s more grim news for Dems in the latest University of Michigan consumer sentiment index. That survey measures how American consumers view prospects for their finances and the general economy.

As measured by this index, consumer confidence fell last month to 66.8, down from 71.7 the previous month. The latest number is the lowest in 10 years.

This is another one of those “unexpected” developments. Economists surveyed by Bloomberg had expected that the consumer confidence index would rise slightly. (Would you participate in a survey about what another survey will find? I wouldn’t.)

The University of Michigan survey found:

Half of American families anticipate bringing home smaller incomes after adjusting for inflation next year.

One in four consumers say inflation has led to a reduced standard of living.

Rising prices for homes, vehicles, and durables were reported more frequently than any other time in more than half a century

The chief economist who worked on the survey explained the decade-low level of consumer confidence by pointing to the obvious cause — inflation. He added that there’s a growing belief among consumers that “no effective” policies have been put in place to reverse the trend.

Actually, the Democrats are trying to ram through another massive spending increase that would accelerate the inflationary trend, not reverse it.

As to the economic effects of declining consumer confidence, the chief economist said:

The moods of consumers play a central role in how information is processed. Positive moods promote more casual and less detailed information processing, and negative moods promote more formal and deliberate information processing, especially of potentially negative developments.

(Emphasis added)

I think that means low consumer confidence is bad for the economy in the short term. I’m pretty sure it’s bad news for Democrats.

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