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RAPAPORT... The Gallup Organization released poll results on April 28, 2011, showing that 55 percent of consumers in the U.S. still believe the country is in a recession or depression, despite statements from the Federal Open Market Committee (FOMC) that "the economic recovery is proceeding at a moderate pace." In a daily survey conducted ongoing by Gallup, 64 percent of consumers said this week that the U.S. economy is getting worse, in large part due to the soaring cost of living; and that figure is up 10 percentage points from April 2010.
When taking income levels into account, the wealthier classes have more optimism. Of those earning $75,000 or more, only 52 percent believe the country is in a recession or depression, whereas 65 percent of those earning less than $30,000 believe that way.
Consumer spending behavior reflects mixed results. The most recent government data, which was for the month of March, indicated that U.S. consumer spending was basically flat from the previous month up 0.6 percent. Gallup's daily spending trends continue to reflect volatile movement, but for the two week rolling average through May 1, which included Easter, the average daily spending by consumers was $79, up from $67 one year ago. But the rolling three-day average, which didn't include Easter, was $63 through May 1, compared with $74 one year ago.
Meanwhile, energy prices are pinching the consumer wallet having risen by a 40.5 percent annual rate in the first quarter of 2011. Food prices were headed for a 6 percent annual jump measured by increases in the first quarter. Higher prices seemed to have impacted consumer confidence strongly in March and fears eased somewhat in April, according to the Conference Board. The Conference Board Consumer Confidence Index for April was 65.4 points, up from 57.7 points one year ago.
Lynn Franco, director of The Conference Board Consumer Research Center, concluded, ''Consumer confidence, which had declined sharply in March, posted a modest gain in April. Consumers’ short-term outlook improved slightly, suggesting that the uncertainty expressed last month is easing. Inflation expectations, which had spiked, retreated somewhat in April. Although confidence remains weak, consumers’ assessment of current conditions gained ground for the seventh straight month, a sign that the economic recovery continues.”
Those stating conditions were “good” decreased slightly in April to 14.8 percent while those stating business conditions were “bad” declined slightly to 36.4 percent.
In a separate measure, the Bloomberg Consumer Comfort Index, which has been negative since March 2007, was negative 45.1 points on April 24, slightly better than the negative 49 point reading one year ago.
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