The first entirely post-election reading from the University of Michigan-Thomson Reuters consumer confidence survey came out on Friday. It was awful. As reported at MarketWatch, the overall index "fell to 74.5 from 82.7 in November," far below expectations of 82.0, representing "the biggest one-month drop since March 2011." Zero Hedge noted that it's the "biggest miss on record" compared to expectations.
Of course, in Establishment Medialand and with the analysts they chose to consult, the plunge has everything to do with the "fiscal cliff," and nothing to do with the reelection of President Obama to a second four-year term or his intensely partisan conduct since then. Sure, guys.
Coverage of the U of M confidence survey barely exists at the Associated Press's national site. An 8:20 ET search on "consumer sentiment" (not in quotes) only surfaced one result, wherein the AP's Christopher Rugaber only tells us that "A survey of consumer sentiment fell sharply in December, economists noted, partly over worries that taxes could rise next year." He didn't even tell us who did the survey.
Over at Bloomberg, Lorraine Woellert's coverage carried an understated headline ("Michigan Consumer Sentiment Declines More Than Forecast") and understated content (bolds and numbered tags are mine):
Confidence among consumers fell more than forecast in December [1], reaching a four-month low as Americans grew concerned about the possibility of higher taxes next year.
The Thomson Reuters/University of Michigan preliminary consumer sentiment index decreased to 74.5 this month from 82.7 in November. Economists projected a preliminary reading of 82 for December, according to the median of 67 estimates in a Bloomberg survey. [1]
The group’s gauge of consumer expectations dropped to a one-year low as households fretted that lawmakers will fail to avert the so-called fiscal cliff of higher taxes and government spending cutbacks set for 2013. At the same time, job growth, rising home values, lower gas prices and stock market gains may keep spending, which accounts for about 70 percent of the economy, from faltering. [2]
“The fiscal cliff is going to bum people out,” Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut, said before the report. “The consumer had held up pretty well into the summer and early part of the fall and in particular consumer attitudes had been super strong. My fear is that’s going to fade a little.” [3]
Estimates for the confidence measure ranged from 80 to 88 according to the Bloomberg survey. [3] The index averaged 64.2 during the last recession and 89 in the five years leading up to the 18-month economic slump that ended in June 2009.
Notes:
[1] (tagged twice) -- "More than forecast"? How about 12 times more than forecast (8.2 points actual vs. 0.7 forecast)? I guess adverbs like "far" (for "far more") or "much" (for "much more") weren't in Woellert's dictionary on Friday.
[2] -- Consumer spending already faltered months ago. The third-quarter report on gross domestic product revised an already weak original annualized estimate of 2.0% in personal consumption growth down to a pathetic 1.4%. Personal consumption expenditures decreased by 0.2% in November.
[3] (tagged twice) -- This confirms how complete the miss was. The actual result was 5.5 points below the lowest estimate. The analyst's comment contradicts the reality of how weak consumer spending has been all along.
At least Reuters knew how to accurately describe its affiliated publication's reports, telling readers in an unbylined item that the U of M reading was "far below November's figure of 82.7 and the median forecast of 82.4 among economists polled by Reuters." Too bad the others didn't. That's almost enough to make you wonder if the Obama koolaid delivery truck missed one of its appointed stops on Friday morning.
Cross-posted at BizzyBlog.com.
