#908 Consumer Consequence

Well the word is in. We’re in a recession. Some important economic council has weighed all the indicators, surveyed all the indices and consulted all the crystal balls. And they all agree. The US economy is in a recession.
And it’s been going on since last January.
Well I’m glad we have this timely report. I’ll surely rush out and adjust my portfolio to accommodate the shifted economic horizon.
I’m glad after a year they finally decided to call it. “Housing bubble burst” and “credit freeze” and “economy cratering” were all getting so cumbersome to say. “Recession” is a so much cleaner and yes, economical word.
Only one problem: the engine that supposedly drives this vehicle we call the economy hasn’t been told. I’m talking about consumer confidence. Or in this case consumer unconsciousness. It doesn’t seem to be paying a whole heck of lot of attention to its shrinking 401ks and such.
Because people keep spending. The day after Thanksgiving, Black Friday as it’s often known—I think because of the color of commuters’ automobile exhaust as they idle their cars to keep warm outside of malls at 4 a.m.—was a huge success. Spending was up 3 percent from last year.
And, get this, last year was the top of the economy before it slid into recession, according to the learned council I mentioned earlier. December 2007 was the peak of the peak.
And consumers just spent 3% more than the peak of the peak.
Not only that. On Halloween, presumably in the valley of the valley, consumers still managed to spend 6 billion dollars on candy, costumes and decorations. All Hallow’s Eve was not the day of the dead economy.
So, I’m just saying, it seems to me the consequence of all this consumer confidence is that the consumers are ready and willing to do their part to juice the economy.
And the Wall Street who, as one wag put it, has predicted 50 of the last 10 recessions, needs to pull its head out and get speculating again.
Because there’s one sure thing you can bet on: The American consumer loves to spend.
America, ya gotta love it.