Consumer and Investor confidence is an important indicator for the economy. If confidence is high consumers are spending, investors are investing and the engine of the economy is being fed. If confidence is low people hide their money in an old mattress in the cellar (the one under Grandma’s old kitchen table).
An ominous sign for the economy is both investor and consumer confidence continues to fall. Both Rasmusen and Gallup unveiled studies today reflecting the dark clouds approaching the American economy
The latest Rasmussen poll shows that investor confidence is at a new 2010 low and is down seven points from a week ago and nine points from a month ago. The Consumer Index dropped a point today to 72.8. Consumer confidence is down just three from last week, and down six points from a month ago.
Aside from a a rise in optimism in April (following some good economic news), consumer and investor confidence has returned to poor levels found in the beginning of the year.
Among all Adults nationwide, 29% rate their personal finances as good or excellent, while 23% give them a poor rating. Meanwhile, 26% claim their finances are improving, while 52% say they’re getting worse.
Among investors, 41% rate their finances positively, while 12% rate them poorly. Twenty-nine percent (29%) say their finances are getting better, but 51% state they’re worsening.
Seventy-one percent (71%) of all Adults say the economy is in a recession, while 73% of Investors say the same.
The Rasmussen Employment Index, a monthly measure of worker confidence, slipped a point in June after reaching a multi-year high the month before.
The Rasmussen Consumer Index reached its highest level ever at 127.0 on January 6, 2004. The all-time low was reached on March 10, 2009 at 54.7.
The Rasmussen Investor Index reached its highest level ever at 150.9 on January 7, 2004. The lowest level ever measured was 52.5 on March 9, 2009.
The baseline for the Rasmussen Consumer Index was established at 100.0 in October 2001. At 72.8, overall levels of economic confidence are significantly lower today than they were in the aftermath of the 9-11 terrorist attacks.
The Gallup company tells the same story as as Rasmussen:
The decline in confidence seen in recent months is owing primarily to mounting public skepticism with the economy’s direction. Thus far in July, 30% of Americans, on average, have said the economy is getting better and 65% have said it is getting worse, for a net -35 economic outlook score. This is down sharply from -13 in April.
By contrast, the net percentage of Americans calling current economic conditions “excellent” or “good” rather than “poor” is averaging -36 so far this month. This is only slightly below the -30 recorded in April and is comparable to the level seen for much of 2009 and early 2010.
All of this give credence to the people who say we are heading toward a double-dip recession. The economy is not being fueled by spending and soon it will simply run out of gas.