Did you hear the news? Consumer confidence is low—very low. On June 24, the Conference Board Consumer Confidence Index was released. The Index now stands at 50.4, down from 58.1 in May. According to The Conference Board’s website, this reading is the fifth lowest ever. Their Expectations Index fell to 41.0 from 47.3—a new all-time low.
The Reuters/University of Michigan Index of Consumer Sentiment was 56.4 in June, down from 59.8 in May and down substantially from one year ago, when the index stood at 85.3.
Since consumer spending represents two thirds of U.S. Gross Domestic Product, these numbers are disconcerting. However, nobody asked me about how confident I was. I’m not sure how I would have answered but I do know that I was never asked. So, who was asked? A random group of people?
The Conference Board says that they poll 5,000 representative people for their index. The Reuters/University of Michigan folks tell us that they collect 500 responses.
I’m not feeling so confident about these surveys. Here’s why. The typical person in the U.S. is pretty much clueless about important matters. I apologize if this statement offends someone, but let me explain.
The “dumbing down of America” movement has been in full swing for a few decades now. There are millions of people in our country who never read a newspaper, stay current on important issues, follow world events, or participate in the political process. Many have high school diplomas and even college degrees.
But these folks fit right into a society with few, if any, expectations of its citizens. As long as a person stays up on the tabloids, watches Oprah, and knows who won American Idol, they’re more than qualified to jump into most water cooler conversations.
These are the same people who don’t vote, don’t know who our President is, don’t follow any current issues, and who live their lives in their own worlds. Their only news comes from the one-minute segment on the radio or the sound bites that they happen to overhear during their pop culture life.
I have a funny feeling that these are the “representative” people being polled by The Conference Board. I have a hunch that they are included in the Reuters/University of Michigan index. So, I’m not all surprised that “consumer confidence” is low. If I didn’t know any better and all I ever heard was bad news reported in the sound bites, I’d be a little bummed out too.
Maybe they should ask me. Maybe they should ask some of my clients. Maybe they should ask some business owners around the country. Sure, we’re concerned about fuel prices, tightening credit, etc, but we’re also confident about the future. We’re confident in our own abilities. We’re confident about our businesses.
We’re not confident that our government is going to protect our businesses, allow us to compete freely in a global economy, or keep their hands out of our bank accounts. But they don’t ask us about this. In fact, they don’t ask us at all. Makes you think, doesn’t it.
P