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United States News Title: U.S. Michigan Consumer Sentiment Index Unexpectedly Declined in October Confidence among U.S. consumers unexpectedly declined in October, with Americans more pessimistic about current economic conditions. The Thomson Reuters/University of Michigan preliminary index of consumer sentiment decreased to 67.9, the lowest since July, from 68.2 in September. Economists estimated an October reading of 68.9, according to the median forecast in a Bloomberg News survey. Unemployment projected to remain above 9 percent through next year may keep weighing on sentiment and make Americans reluctant to ramp up their spending, which accounts for 70 percent of the economy. Retailers like Target Corp. and Wal-Mart Stores Inc. are responding with more discounts and using promotions ahead of the holiday season to move merchandise. “What we’re seeing in the current conditions reading is concern over the stubbornly high unemployment rate and in the expectations reading, the hope that maybe the situation will improve after the election,” said Christopher Low, chief economist at FTN Financial in New York. Forecasts of the 65 economists surveyed by Bloomberg ranged from 64.4 to 73.5. The Thomson Reuters sentiment index averaged 89 in the five years leading up to the recession that began in December 2007 and has yet to reach that level since the recovery began in June 2009. Consumer Prices Separate figures from the Labor Department today showed consumer prices rose 0.1 percent in September, less than forecast. Excluding energy and food, which are volatile month to month, prices were unchanged for a second month. Retail sales climbed more than forecast in September, easing concern consumer spending will weaken and endanger the recovery. Purchases rose 0.6 percent following a 0.7 percent gain in August that was larger than previously estimated, Commerce Department figures showed today in Washington. The advance was broad-based, with clothing stores the only major category to show a decline in demand last month. Consumer expectations for six months from now, which more closely projects the direction of consumer spending, rose to 64.6 from 60.9, which was the lowest since March 2009, today’s report showed. The survey’s measure of current conditions, which reflects Americans’ perceptions of their financial situation and whether it is a good time to buy big-ticket items like cars, dropped to 73, the lowest since November, from 79.6 in the previous month. Inflation Expectations Consumers in today’s survey said they expect an inflation rate of 2.6 percent over the next 12 months, compared with 2.2 percent projected in September. Over the next five years, the figures tracked by Federal Reserve policy makers, Americans expect a 2.7 percent rate, the same as last month. The drop in 12-month inflation projections since May, as well as slower rates of growth in the consumer price index and the slowing economy has heightened concern about deflation, or a protracted drop in prices. The Fed’s Sept. 21 statement was the first in almost two years of near-zero interest rates to say too-low inflation would warrant looser monetary policy. The Federal Open Market Committee next meets Nov. 2-3. Minutes from their Sept. 21 meeting, released earlier this week, showed policy makers discussed “several possible approaches” to supporting economic growth, mainly purchasing longer-term Treasury securities. Policy makers “saw only small odds of deflation,” according to the minutes. Spending Forecast Consumer spending probably will advance at a 2 percent rate through the end of this year and average 2.2 percent in 2011, not enough to boost the expansion and encourage companies to accelerate hiring, according to economists surveyed by Bloomberg News earlier this month. The unemployment rate will average 9.6 percent this year and 9.3 percent in 2011, making for three years of joblessness above 9 percent, the longest span since monthly records began in 1948. “The consumer is still facing very challenging times,” Mike Bloom, executive vice president of merchandising and supply chain for CVS Caremark Corp., the largest U.S. provider of prescription drugs, said on a conference call Oct. 8. “The economy and unemployment rates continue to be a challenge. The consumer is time starved, saving money wherever she can and always looking for value.” With less than three weeks before the Nov. 2 congressional elections, Americans continue to have a dimmer view of Congress and President Barack Obama’s handling of the economy. Obama’s job approval over a three-day period that ended Oct. 12 was 45 percent, compared with 52 percent at the same time last year, according to a poll from Princeton, New Jersey-based Gallup. Some retailers are projecting better sales at the end of this year and are planning on increasing the number of holiday workers they hire. Kohl’s Corp., the fourth-largest U.S. department store chain, plans to hire about 40,000 people this holiday season, 21 percent more than last year, the company said Oct. 6. To contact the reporter on this story: Courtney Schlisserman in Washington cschlisserma@bloomberg.net
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#1. To: WhiteSands (#0)
Positive Feedback Loop accelerates. "It's decision time, citizens. Either the banks/Central State "win" and we are a kleptocracy/ "banana republic," or they lose and the U.S. mortgage/ banking sector implodes and is either formally socialized (i.e. owned lock, stock and barrel by the Central State) or rebuilt from scratch without big banks, Federal guarantees and the Fed's incestuous interventions. ("We create the credit that enables the mortgage, you issue the mortgage, and then we buy the mortgage.") There is no "fix" or half-measure that can patch this over now." www.oftwominds.com/blogoc...unaway-feedback10-10.html By Halloween. BOO.
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