It was the best of times. It was the worst of times. This sums up two widely watched consumer surveys that depicted a public that is both optimistic and pessimistic about the state of the US economic landscape. The economy remains the top issue for voters heading into the November election. But what are they saying about current and future conditions? It is a mixed portrait.
What Did You Say About the Economy?
The Conference Board's Consumer Confidence Index tanked in September following a solid upwardly revised number in August. It was the sharpest decline since August 2021, as all survey components, be it business conditions or incomes, deteriorated last month. Indeed, the jobs picture continues to be one of the top concerns for many people, says Dana M. Peterson, the chief economist at the Conference Board. The data showed that consumers have the labor market blues, frowning about shrinking hours, slower payroll gains, and fewer job openings.
It is understandable, too. Average workweek hours have been on a downward trend since April 2021. Employment revisions by the Bureau of Labor Statistics confirmed that the monthly job gains have been lower than initially reported. The number of vacancies has declined by more than one million over the last year.
"Consumers’ assessments of current business conditions turned negative while views of the current labor market situation softened further," Peterson stated. "Consumers were also more pessimistic about future labor market conditions and less positive about future business conditions and future income."
The University of Michigan's Consumer Sentiment Index showed a difference in consumers. The final reading for September surged to its highest level in five months and topped market expectations. The Current Economic Conditions Index plunged while the Consumer Expectations Index soared.
"While sentiment remains below its historical average in part due to frustration over high prices, consumers are fully aware that inflation has continued to slow," said Joanne Hsu, the Surveys of Consumers director, in a statement. "Sentiment appears to be building some momentum as consumers’ expectations for the economy brighten.”
Despite the gains, both surveys are below their pre-pandemic highs.
Good News or Bad News for the Candidates
On the one hand, consumer confidence and sentiment levels are not where they were when former President Donald Trump was in office. Advantage: Trump. On the other hand, the trends have been steadily improving in both surveys as headline inflation stabilizes. Advantage: Vice President Kamala Harris. Comparable to the election polling data, something that Liberty Nation News’ Tim Donner has opined, each campaign can examine the findings and come to different conclusions.
"Partisans on both sides of the aisle will reflexively claim the latest survey is either significant if their candidate is ahead or meaningless if the candidate is behind, or they’ll call it an 'outlier' if the result is particularly egregious for their side," Donner recently wrote.
Former CNN and NBC personality John Harwood recently wrote on X that "the craziest thing about this election is that we have a very good economy -- the best in the world -- and so many people feel/act/pretend that it's bad." Let's just say that the social media responses were not positive. And this is the current Democratic challenger's problem: Trying to convince low- and middle-income households that they never had it so good while claiming that more government intervention is necessary to facilitate a “new way forward” of prosperity.
The reality is that, since January 2021, real (inflation-adjusted) hourly wages have been down 4.4%, real median weekly earnings have been down 1.3%, cumulative inflation has been 20%, and consumers' purchasing power has been eroded by 17%. Yes, the consumer price index (CPI) and the personal consumption expenditure (PCE) are inching toward the Federal Reserve’s 2% target. But the bomb went off, and households are still inhaling the debris. Now that prices have reset, there is no going back.
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