Down on Main Street

Wall Street is much happier, but down on Main Street things remain ugly.

Let's do the numbers.

• The ABC News Consumer Comfort Index sits at -50 (that's minus 50) in the most recent measurement.  This scale goes from -100 (low) to +100 (high).  It's hung around there the whole of 2009.  Stocks moving up on Wall Street, comfort unchanged on Main Street.
•  The RBC CASH Index gets at attitudes about the local economy, personal finances, plans to buy big ticket items, etc.  It seems to be up, over 50 for the first time since September of 2008 (when things went kaboom).
• Investor's Business Daily TIPP Poll.  They do three measures.  Looking only at "economic optimism" the numbers suggest a slight tick upward in terms of confidence.  Not a lot, but there's life.
• The Consumer Confidence Index by the Conference Board is slowly improving through 2009, but it's still mired in the 50s as compared to once being at 130 or so.

In all, while Wall Street rebounds, not much happening among real-world folks and businesses.  I'd expect some growth in confidence as stocks do better, if for no other reason than a spillover effect.  And indeed that may explain some of the positive signs we're seeing in these indices.  In terms of what people know, they're more likely to know about their own situations, that of their families and friends, and the businesses they see around them. Jobs are a lagging indicator, so until we see fewer people out of work, these confidence measures will be slow to respond.

Consumer Confidence

I always like to look at the various measures of consumer confidence and optimism. You'll find a nice batch of them here at that marvelous site, pollingreport.com. The TIPP indicators are above 50, which is mildly optimistic (on a 100-point scale). But the ABC News consumer comfort index is stuck in the negatives, -47 at last measure, a tick up from -49 a month ago. That scale goes from -100 to +100, so -47 kinda sucks. A little more complicated is the Consumer Board's confidence index, but it shows nice improvement and optimism of late.

Who cares? We can see the stock market is struggling to rally (Dow up 73 points as I write this) but a lot of people are carefully watching consumer spending. Until it shows up, other problems won't be solved easily, such as unemployment or tax revenues for local and state governments. What people know about the economy is in part based on their own lives, part based on what they see down the street or downtown, and in part what they consume in the media. The green shoots argument that we've hit bottom and see sprigs of life, seems to be true. Or at least as a perception.