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Tuesday, October 29, 2013

Consumer Confidence, Conundrums and other 'Cons'

~ The initial joy and eventual crush of tarnished expectations....

We start with a quote from a famous Beatles song 'Getting Better'  off the Sgt. Pepper CD:

Paul singing: "I've got to believe it's getting Better..  A little Better all the time.."
John on chorus: "It couldn't get much worse"

Today the Consumer Confidence Board released its monthly report for October..
A score of 100 and upwards means there's a sincere recovery, people feel very good about the overall economy and their personal situations, and thus spend/shop accordingly..

October is 71.2 with experts predicting 75

Last month the survey came in at 80.2

We have to be consistent here.. we think the CCB is BS when it posts overly positive numbers and even now we still feel the same..

Its basically a glorified polling agency and its sample sizes are usually too small to give a truly accurate read on the mindset of the US consumer..
That isn't to say we don't also agree with its October findings..

Its really not that difficult to understand..

Most people generate income from work... and the money received is used to pay bills, taxes, food, gas and all other essentials..

Whatever is left after credit card debt is to be saved or used for fun..

When people make less than they did, they have less to spend.
~ Not quite what Linus 'Hoped' 

When people make nothing today vs 5 years ago, they Truly have less..

And when people are told things will get better and they believe the nonsense based on the soothing tone of the words and thus keep spending as usual, ultimately it catches up..

So of course consumer confidence is terrible.

It really should never have spiked earlier this year!
The media always focuses on that one statistic but here's more survey findings right on the CCB's website:

 Those claiming business conditions are “good” decreased to 19.0 percent from 20.7 percent... Those saying jobs are “plentiful” was virtually unchanged at 11.3 percent from 11.4 percent, while those saying jobs are “hard to get” increased to 35.8 percent from 33.6 percent.

That means less than 1 in 5 think things are 'good' regarding business and over 1 in 3 people can't seem to find jobs in this economic climate..

They must be striving for something unrealistic like a position that uses the skills and knowledge from their previous job..
The rest of the polling shows one gloomy pessimistic prediction after another..

Honestly, the question becomes what took people This long to realize the mess we're all in?

There's not many ways a job can be created.. either a private employer opens a vacancy, a government agency opens a vacancy or you start your own business and fill your own vacancy...

Its not the rocket science those evil-doers in Washington pretend...
Let's break this all down clearly and concisely:

1)  Private Sector:

If corporations are making excessive profit on Wall St, there's no incentive to offer real jobs.   And if they do offer work, its pretty much temp work

Smaller businesses also are going the temp route...

And with the additional costs many businesses large and small will be accruing due to Obamacare, there's not only little incentive to hire, but many are frantically looking to cut corners by making their workforce 'part-time'.
There will always be plenty of work in the service industry because the worker survives mainly on tips not a wage so restaurateurs don't have to concern themselves with all the hassles other businesses do in this regard..

A waiter or waitress is as interchangeable as a AA battery.

2)  Public Sector

Government jobs are usually good ones.. higher salary, better benefits and traditionally at least, more job security...

But state, city and local budgets are consistently being cut to come up with the $$$ to pay their pensioners and interest on bonds taken out to pay previous debts..
So these positions just aren't available as they once were..

Then there's the problem of outsourcing and what the British call redundancy

If a computer can do your job, why are you needed?  You are now 'redundant' i.e. dismissed..

And government is having to figure out ways to do more with less..  like police and fire departments being shared among communities.
Off the top of our heads, we think of Camden NJ as an example.. they can't afford their police and fire anymore so the county they are located in and an adjacent one share law enforcement and fire duties...

Teachers around the nation are not secure either.  They've always historically been overworked, underpaid and deeply resented by the parents because they get summers off

But now computers are making their jobs more and more redundant...

And we see a day if its not already come, where a school district perhaps hires one English teacher for every 300 students instead of 30...
Basically everyone sits in front of their PC's.. an instructor gives direction..   the kids do their work and you have 'supervisors' making $12/hr in every classroom simply making sure the children are paying attention to the monitors..

Certainly cheaper than a teacher in every room making $25/hr

3)  Self-Entrepreneur..

This is not for everyone.. It takes business ability, savvy and in many cases natural people skills to be a success..  Or at least know how to spot a good salesperson to hire..

Its not an easy path and riches are not guaranteed BUT its the only option to try to make a living without being 100% dependent on another to provide you an income...
You also avoid all the time wasting interviews and empty rejections

Some ideas like opening a restaurant are a very risky proposition..  Half of all new restaurants close up within six months and even more within a full year...

But the right product or service aimed at the right target demographic at the right price point..  And you may have something special going on...

And that's really the only three ways a job is created...

To repeat:  Congress and the President have done nothing to improve the jobs picture.. only bicker, posture and take turns capitulating on this or that...

The private sector knows things are bad and thus going the cheap route,  government jobs are scarce and those one retains isn't as protected as once was, and the self-employment route is not easy-- it just allows a person the opportunity to take charge of their lives directly..

Some are excited by that... some are scared shitless...
And thus it is fully to be expected that consumer confidence is terrible...

Now if people would ever learn to stop blaming themselves and put the pieces together to this child-skilled jigsaw puzzle, perhaps we the 99% would have a chance at a future..

Instead we just sit around and keep believing its got to get better...a little better all the time..

Cause you know.. 'it can't get much worse..'   Can it?