US Consumer Sentiment: Telling Tales

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Consumer sentiment roared to an 85.1 level in July and we were told that the US economy was back on the railroad to recovery. Although, there were many people out there that saw that train as on track for the railroad to hell more than anything else. Now, figures that are released show the consumer feeling was much lower in August than had been expected. It looks like the sun has gone in, if it ever managed to peek out from behind the rain clouds of the Federal Reserve, QE and the rest of the scandals rocking the country with the Obama and the National Security Agency being shopped for surveillance by Edward Snowden.

Consumer sentiment in the US fell in August to 80, while July’s figure was the highest since the financial crisis rocked the world. Economists had been upbeat about where the US economy was going. At least, the mainstream media (which means that it wasn’t necessarily happening) had been pointing to signs of recovery. They had predicted a rise in August yet again to 85.5 and now that has sent the cat amongst the pigeons. No need to question and wonder in awe for too long at who might be the pigeons.

Unemployment

It’s a telling tale when the consumer sentiment of any economy goes down. The government can tell tales as much as they like but it still points to the feeling of consumers in society. That feeling shows that the American people believe that the recovery is not going to happen, or at least growth will not continue at the rate that has been announced. Employment will not fall any time soon to that all-important figure that has been announced by Ben Bernanke as his target at under 6%, while it still hovers at around 7.4% today. Added to that, the fact that the U6 unemployed classification (people who are seeking full-time employment) is not counted in the figures as they are marginally employed (working for as little as just one hour a week perhaps) is a telling sign.

The figure that is released by the Bureau of Labor Statistics and that is reported by the media shows that the U3figure of unemployment (which excludes all people that are discouraged from seeking work four weeks prior to publication). The U3 figure stands at 7.4% today, while the U6 figure is at over 14%, double the figure that is being bandied about by the US government to show that the economy is picking up. So, telling tales doesn’t wash with consumers.