Consumers are upbeat even as job creation lags
A job seeker waits to have her resume reviewed during a job fair on July 10, 2012 in San Francisco, California.
The Department of Labor’s monthly jobs report for May will be out this morning. Economists expect another relatively mediocre performance: 165,000 jobs added, the same as in April, and unemployment stuck at 7.5 percent.
But mediocre is not how consumers are feeling about the economy and the job market. Several years after the recession has officially ended, consumers are finally starting to feel some love.
“May saw a jump to a five-year high in consumer confidence,” says Lynn Franco, director of economic indicators at the Conference Board, which reports monthly on consumer confidence. The Conference Board's index dipped early in 2013, as consumers got anxious about a variety of policy and pocketbook issues -- from sequester cuts in federal spending, to the fiscal-cliffhanger, to the payroll tax hike.
Franco explains that during the recession, about 50 percent of respondents to the Conference Board’s surveys said jobs were hard to get. That’s down to 36 percent now.
“It’s still a little high by historical standards,” says Franco. “I wouldn’t say consumers are euphoric. It’s not that they’re telling us that the labor market has taken off and caught fire. But there has been some moderate improvement in how they view the labor market.”
Franco says consumer confidence isn’t so much tied to the official unemployment and job-creation numbers -- which most people don’t know follow closely, anyway. What drives change in a consumer's attitude about the economy is more likely to be their own job, or the employment situation of friends and family.
“Is there a hiring freeze? Am I getting more overtime?” -- she says these are the kinds of questions people ask themselves as they set expectations for the future, and decide how much they can afford to spend.
On a recent weekday, well-dressed office-workers filled every table at an outdoor café selling gourmet sandwiches in Director Park in downtown Portland, Oregon. 34-year-old Miles von Bergen, who works as a commercial real estate broker, was grabbing a quick lunch.
“I know people who have lost their jobs, I know people who are still unemployed,” says von Bergen. “But I know people who have gotten jobs, people who have been promoted. I think there’s cautious optimism.”
Von Bergen says his own business is improving, as demand picks up for commercial, warehouse and industrial space. But he doesn’t think the job market is getting much better.
“In terms of any major hiring that’s going to take place? I think there’s improvement in the business sector," von Bergen says, "but that has come from gains in efficiency -- from not hiring,” says von Bergen.
Sally Kenney is a retired IT auditor, and she was dining in the park with a friend. She’s also more upbeat than she was a year ago -- more confident about spending her money.
“Probably it’s because the stock market, my investments, look a whole lot better,” she says. “Unfortunately, I don’t see that much change in unemployment. What concerns me is our college graduates -- the 24-to-35-year-old age bracket -- that’s a group with high unemployment."
Kenny’s anxiety for this group comes from personal experience. One of her own adult children is still unemployed.