The wall street debacle is impacting consumers-poll data
September 19, 2008
According to some polls, the crisis on Wall Street is having a significant impact on overall consumer confidence with obvious implications for spending in Q4.
Obviously, it’s more than just Wall Street, but, it clearly isn’t helping an already nervous nation.
IPSOS- September 19th..
– 60% of Americans doubt the government’s ability to restore confidence post-crisis
– 90% believe events will have a negative impact on the economy
– 76% believe the home mortgage crisis will continue to worsen
– 45% believe the economy will be worse off six months from now
– 44% of Americans will spend less or a lot less on gifts this year than in 2007
– 23% of Americans believe the country is in a depression
– 39% rate the condition of the economy as very bad
– 39% rate the condition of the economy as fairly bad
– 61% believe the economy is getting worse
Things can shift with changes in gas prices and with market moves as we’ve just seen this morning, but the overall mood is very negative and probably will not pick up until there are signs of life in the housing market.
According to the experts, the IMF (First Deputy Director John Lipsky), speaking in Washington on Thursday believes this could happen towards the end of 2009.
“First, as noted earlier, oil prices have come down sharply in recent
weeks. This should reverse a significant portion of the adverse
terms-of-trade effects arising from the more than 60 percent increase
in oil prices during 2008 and the erosion in purchasing power and real
wages being felt by most advanced economies. In the United States, if
oil prices remain at current levels, the implied boost to real
disposable income will rival the value of the income tax rebates.
Indeed, in our projections, we expect a modest rebound in consumption
in both the United States and euro area over the course of 2009.Second, it is plausible to anticipate that the U.S. housing market
will find a bottom in 2009. Already, the inventory overhang is
diminishing, while affordability measures are returning to levels that
appear much more consistent with past experience.”
Looks like it’s going to remain very tough for at least another year.
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