U.S. Consumer Sentiment at Second-Lowest Level of Year in Bloomberg Index

[xchrom]

http://www.bloomberg.com/news/2011-09-08/u-s-consumer-comfort-index-falls-to-second-lowest-this-year.html

U.S. consumer confidence last week fell to the second-lowest level this year as Americans grew more pessimistic about the world’s largest economy.

The Bloomberg Consumer Comfort Index was minus 49.3 in the period to Sept. 4 compared with minus 49.1 the previous week. This year’s low of minus 49.4 was reached in May, when gasoline prices were the highest in three years. While the drop was within the survey’s 3-point margin of error, the index has been stuck below minus 40 -- the level associated with recessions or their aftermath -- since the end of February.

Job creation stagnated in August, the unemployment rate held above 9 percent and hourly wages retreated, giving households little to cheer about. Pessimism stretches across social, economic and political lines, posing a threat to consumer spending that accounts for 70 percent of the economy.

“Falling sentiment indicates signs of growing distress in the consumer sector,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. The results reflect “a labor market that has seized up and the lagged effects of inflation that is effectively reducing the purchasing power of households.”

[OhioChick]

1. We have reason to be pessimistic

K&R

[xchrom]

2. indeed: Jobless Claims Climbed to 414,000 Last Week as Labor Market Shows Strains

http://www.bloomberg.com/news/2011-09-08/u-s-jobless-claims-unexpectedly-rose-to-414-000-last-week-1-.html

Claims for U.S. unemployment benefits rose last week, a sign the labor market is struggling to gain traction more than two years after the recession ended.

Jobless claims rose by 2,000 to 414,000 in the week ended Sept. 3, Labor Department figures showed today in Washington. Economists surveyed by Bloomberg News projected a drop in claims to 405,000, according to the median forecast. The number of people on unemployment benefit rolls and those receiving extended payments fell.

Companies are stepping up the pace of firings, raising the risk that consumer spending will slow further. Job growth stagnated last month and the unemployment rate held unchanged at 9.1 percent, the Labor Department reported last week. The Labor Department said there was no national effect from Hurricane Irene.

“It’s suggesting sluggishness rather than a dramatic new weakening,” said Jim O’Sullivan, chief economist at MF Global Inc. in New York. “Recessions are associated with claims shooting up and so far that hasn’t happened.”

[OhioChick]

3. Things sure aren't looking rosy....

But I did hear we're going to get a pretty speech later.