Gallop, who actually goes out and survey’s real live individuals rather than guessing at the numbers from the Bureau of Government Guesses and Hopes, found out something this past week that you already knew.
Americans’ optimism about the future direction of the U.S. economy plunged in March for the second month in a row, as the percentage of Americans saying the economy is “getting better” fell to 33% — down from 41% in January. It is also down three points from the 36% of March 2010.
The impact of rising food and energy costs are starting to nip and the average real American’s ideals about an economic recovery. While we continue to look at index after index that has yet to confirm anything other than a stimulus charged statistical economic recovery Gallop comes to the same stunning conclusion:
Even as economic adversity seems to mount, the U.S. commodity and equity markets remain near their highs for the year. Surging oil and commodity prices mean higher profits for many companies and investors. Further, a weak U.S. economy suggests the Federal Reserve will continue its easing policies despite some tightening in Europe. While the weakening of the global economy may not be good for U.S. exports, the declining U.S. dollar may moderate the negative impact on many U.S. exporters and their stock values.
On the other hand, American consumers face several major challenges. Soaring gas and food prices not only reduce disposable income but also discourage additional spending as the cost of necessities increases. Global events, continued political battles about the budget in the nation’s capital, and a weak, if modestly improving job market add to consumer uncertainties. As a result, it is not surprising that consumer confidence plummets even as Wall Street continues to do well.
However, if consumers continue to lack confidence and spending doesn’t increase, it is hard to see how the U.S. economy can continue its modest improvement. In turn, it would seem Wall Street and Main Street will have to align at some point going forward. Either Wall Street will prove right and economic conditions on Main Street will improve or the reverse will prove to be the case.
So, while the NFIB confirms that Small Businesses remain reluctant to hire and expand – Gallop confirms that the consumer is contracting as well. This, therefore, begs the obvious question – if everyone is hunkering down then where is the economic recovery actually going to come from?