Americans won’t fully open their wallets until there are more jobs (photo: Fred Prouser/REUTERS)
January’s consumer confidence number just trickled in, and it’s better than anticipated. The headline index rose to 60.3, from 53.3 in December: the market expected it to come in at 54.0. That’s an 8-month high, and the strongest month-to-month jump in 20 months.
But before President Obama goes sneaking this upbeat news into the State of the Union address, he should take a closer look at the numbers.
Paul Ashworth, chief US economist at Capital Economics, writes:
“The gap between the number of respondents saying that jobs were plentiful compared with the number saying jobs were hard to get did decline a little, to -38.2, from -41.8. But the gap remains deep in negative territory and only slightly improved from the levels during the worst of the recession. At its current level that gap, which has historically been a good leading indicator of the unemployment rate, suggests that rate will remain close to the current 9.4% for at least another few months.”
Consumers can be confident, cocky, whatever. But as long as unemployment hovers near double digits, neither side can sell a rosy economic story. Plus, as Ashworth writes, “Overall, any improvement is good news, but confidence is still at historically depressed levels.” So, big picture, consumers are not all that upbeat, and too many are still unemployed. Expect to hear this news tonight: in the Republican rebuttals to Obama.