In its May press release, the Conference Board organization is reporting that, while consumer confidence rose slightly in May, reversing a three-month downward trend, the outlook still remains bleak.
For more information on the Conference Board, readers may go to https://www.conference-board.org/us/, where this description of their activities may be found.
“The Conference Board is the global, nonprofit think tank and business membership organization that delivers Trusted Insights for What’s Ahead™. For over 100 years, our cutting-edge research, data, events, and executive networks have helped the world’s leading companies understand the present and shape the future.”
In this press release, the Conference Board discusses four key components that are likely to provide an insight as to what the U. S. economy may be like in the months ahead.
The Consumer Confidence Index increased from 97.5 in April, to 102.0 in May, but this modest increase came on the heels of several months of decline, and current levels have never reached the pre-Biden levels.
The Present Situation Index also experienced a minor uptick, from 140.6 in April to 143.1 in May, but it has been in a downward trend since it achieved a post-pandemic high of 160.0 in mid-2021.
To observers of the economy, the Expectations Index performance is the most troubling. Even though it went up from 68.8 in April to 74.6 in May, it has remained below 80 for four consecutive months. Sustained, below-80 levels often signal a recession ahead.
That fear of a recession was confirmed in the most recent Consumers’ Perceived Likelihood of a US Recession over the Next 12 Months. That index has increased in both April and May
Elsewhere, we are seeing signs of concern over the economy. Both the Gross Domestic Product (GDP) and the Consumer Price Index (CPI) are heading in the wrong direction.
According to the U. S. Bureau of Economic Analysis, the GDP grew at annual rate of 1.3 in the first quarter of 2024, which is a substantial drop from the 3.4 rate of the third quarter of 2023.
The U. S. Bureau of Labor Statistics is reporting an increase of .3 for April, the last month available, and a 12-month increase of 3.4. This indicates that inflation is far from being under control.
This raises the concern that we may be headed for a period of stagflation, a deadly combination of low growth and high inflation. In a recent AZ Daily Independent article, we discussed the specter of stagflation That article may be read HERE
One last piece of important economic news is coming from the stock markets. In the last few days, the markets have lost all or most of the gains they made earlier in May. While most citizens do not invest directly in the markets, many do, indirectly, if they have retirement plans. Those already retired are most likely to be affected by this. Market losses are likely to influence their economic expectations.
It’s a challenge to trust any think tank’s opinion on any day. But during an election cycle these partisan groups seek to dumb down the American public even more. They want us to rely on their interpretation of pared down data from government and these groups instead of our own economic experiences. Their message is to ignore our lying eyes and dwindling bank balances, in favor of the messages of really really smart people they employ.