Consumer Confidence Lower than Expectations

Consumer Confidence came in today well below expectations. This shows the continued disconnect with the average consumer who is feeling pretty down about job prospects and the overall economy vesus the press who wants to announce things are doing better.

Though there are signs the worst may be behind us that doesnt make the 5 million workers who are now unemployed feel much better about their own circumstances. If consumers don't feel good about their own economic future they may be less willing to part with the money they do have for discretionary spending. Ultimately if consumers aren't consuming businesses will suffer and that will keep employers from hiring new employees as well as limit the tax revenue the government recieves.

Low tax receipts will make our deficit problems continue for a longer period of time. Deficits also need to be covered (paid for) by the issuance of Treasury Bonds and the more debt we accumulate the more real inflation becomes for us in the future.

On a positive note...today interest rates are better because of the low Consumer Confidence number and the implication that low Consumer Confidence will keep inflation low. Other news that has been a help to mortgage bonds is the turmoil in Greece. With the struggles in Greece hitting front page news it is clear now that there are other countries that are weighed down with a lot of debt that are having trouble covering their bills through this recesion.

It is worth looking around the world and noticing the policies of Greece, Spain and others who have expanded the services their government offers that they can no longer afford. Accross the ocean in Japan we see very similar issues. The US is not immune to this issue. With the HUGE budget deficits the past two years we need to be taking a hard look at the road ahead and changes may be necessary...even though change would be painful for many in our society.

We should all take these stories and apply to them to our own lives. If you are going to buy a home always make sure you are purchasing a home that you can afford and make sure you have funds available for that 'rainy day' as things aren't always going to be rosey. I would love to help you work through your budget to find the right price point for your family if you are looking to purchase a new home while the buyer credits are still offered through April 30th.