This just in: The American public isn’t buying what the Federal Reserve, the White House and the national media are trying to sell them on the economy.
Despite assurances from Reserve Chairman Ben Bernanke that the recession is over; from the Obama administration that the $787 billion stimulus has worked; and from the media that we’ve turned the corner economically, the data suggests that the powers that be are speaking too soon.
After all, when the lead headline in the Associated Press this morning reads “Great time for US consumers: America is on sale,” you know that times remain tough – and that they could get worse before they get better (or more frighteningly, could get better before they get worse).
We’ll leave talk of “W” vs. “U” vs. “V”-shaped recessions to the economists, many of whom are going back to the drawing board, anyway. This after another release of lousy job numbers on Friday (unemployment is now officially at 9.8%, and unofficially at 17% if you count people with only part-time jobs or who have stopped looking). The stock market, which historically is a forward-looking indicator, is down as the recent two-week sell-off portends a weakening economic picture in the eyes of investors.
As for consumers, sentiment remains low. According to the September Conference Board Consumer Outlook Survey, the CB index fell to 53.1%, that’s down from 54.3% in August. More tellingly, the percentage of consumers describing the business environment as negative rose from 44.6% in August to 46.3% in September – just as the White House, the Fed and the media were telling consumers that things were getting better.
So it’s that disconnect that’s helping paint the mortgage picture this week – a canvas that could lead mortgage buyers sprouting rosier cheeks, but one that should leave economic experts looking like a paler shade of white.