A tale of two consumers
A shopper tries on shoes at a department store in Washington, D.C.
Today, consumers seemed to be of two minds: first we heard that retail sales were up a surprisingly good 1.1 percent and that the increases were seen across the board from cars to restaurants and department stores. But then came word that consumer confidence slipped further into a dark deep place.
What gives? Are consumers telling pollsters their economic fears just before going out to buy a new car or the latest gadget? No matter, the markets have regained their losses from the scary days of August, when S&P downgraded the U.S. credit rating and another recession seemed almost a done deal.
We talked to Stuart Hoffman, chief economist at PNC in Pittsburgh. He says that the past month or so shows the "scare bear economists" who were predicting recession to be wrong. Hoffman points to the retail numbers that have held up; the unemployment numbers which - while not great - do show signs of slow improvement. Plus many of the horrible August numbers, such as that month's jobs picture, have been revised upward. He says that the numbers in September and October show that the U.S. is holding its head above water. And he says numbers out of India and China show the global economy also on the rise.
Hoffman even points to Europe where policy makers seem ready "to plan to make a plan" to solve the debt crisis. He says it is a sign of progress and he expects that the Europeans will slowly get their act together.
Hoffman says that the corporate earnings season looks like it also could give the economy some good news. Google's announcement yesterday that its earnings shot up in the most recent quarter showed that the strong are holding on to their strength. But he says we won't know for sure until the bulk of the S&P 500 companies announce their results in the coming weeks.
Still Hoffman says that it's not really time to celebrate, not until the most intractable problem shows signs of improvement. Unemployment still lingers as a human and economic tragedy. And so far, the growth we've seen hasn't been robust enough to help the jobless. Happy days won't truly be here again until people across the globe have an easier time finding a job.
Also on the show today, news that toy-maker Mattel saw its net income grow by $20 million thanks to a big boost from worldwide sales of its Barbie and Cars 2 product lines is good news for the Marketplace Daily Pulse.