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Mix-Ansicht- Dem US-Konsumenten gehts immer besser! Schulden, welche Schulden? - kingsolomon, 12.12.2002, 21:37
Dem US-Konsumenten gehts immer besser! Schulden, welche Schulden?
-->sagt Briefing.com ( auf finance.yahoo). Darauf würden die Pessimisten kommen,
wenn sie sich die Fakten ansehen würden...
[BRIEFING.COM - Gregory A. Jones] You might think that we have beaten the consumer issue to death, and you'd probably be right. But so much nonsense continues to be written that we must constantly defend our more optimistic argument against a steady stream of pessimists.
That we call the pessimistic arguments nonsense does not mean that a more optimistic outcome is certain or that a pessimistic forecast is by definition nonsense. These are economic forecasts after all, subject to all the usual uncertainties. The nonsense that we wish to address is not the conclusion reached by more pessimistic forecasters, it is the fact that many of them base their conclusions on dubious and sometimes plainly false assertions.
Instead of making our case for a cautiously optimistic consumer outlook (2-3% real spending growth over the coming year), we'll instead highlight some of the myths that are becoming part of the conventional wisdom. The following myths are paraphrased versions of actual arguments that we have seen advanced by market commentators.
Consumers are stretched much further than a year ago, with unemployment higher, and the Fed having used most of its ammunition.
Consumers are stretched much further: this is one of those great assertions that contains no actual information. What exactly does stretched mean? The facts suggest that consumers are actually stretched less. The consumer debt service burden relative to income has fallen over the past year, and the savings rate has risen significantly. Be wary of anyone who makes vague statements like this - they are often based on incorrect assumptions gleaned from mainstream media reports rather than facts.
Unemployment is higher: we hear this one all the time, and while it's true in some months, it's misleading. The unemployment rate ended 2001 at 5.8%; in the last three months it has been 5.6%, 5.7%, and 6.0%. A fair statement is that the rate has been flat over the past year. Another fair statement is that 6.0% is relatively low: from 1975 through the beginning of this latest expansion in 1994, the unemployment rate was 6% or higher 78% of the time.
The Fed item is a classic non-sequitur - how does the Fed having used a lot of ammunition suggest a bleak consumer view? The opposite is true of course; aggressive Fed easing in the past is still working its way through the system and bodes well for future consumer spending. Furthermore, the Fed has plenty of ammunition left. Not only can it cut rates to 0% from the current 1.25%, but the Fed can then buy all the Treasury securities they want, thus pumping liquidity into the system.
The Fed recognizes that consumers are extended and that capital spending is needed to boost the economy. If they are successful, consumers have still overspent. If they aren't, we get a double dip recession. Either way, retail sales are going to fall.
This commentator is telling consumers they face a heads I win, tails you lose scenario. It's hard to believe that anyone can believe consumer spending generally or retail spending specifically could fall next year even if business capital spending growth accelerates. Please tell me which Vegas casino will give me even odds on that.
If capital spending picks up, unemployment will fall, income growth will accelerate, and consumer spending growth will almost certainly accelerate as well. It really is that simple.
Consumer sentiment is down and the recent Mitsubishi chain store sales index was weak.
This comment has a distinct advantage over our first example in that it is at least true. But it's also of little relevance. Consumer sentiment is indeed down. It was down even more in late 1991 prior to a year in which consumer spending posted real growth of 4.6% (Dec 1992/Dec 1991). So let's not get carried away with consumer disappointment with the sluggish pace of recovery - they were disappointed in 1991 as well, but kept right on spending.
As for the Mitsubishi numbers, they are an interesting sidelight, but the notion that any one week's chain store numbers tell you anything about overall consumer spending is not credible. These weekly surveys are based on a small sample of chain stores, which in their entirety comprise roughly 5% of consumer spending. Furthermore, judging consumers based on sales during a week when an ice storm slammed a large swath of the country is probably not a good idea.
How Blue Will Christmas Be? As sales keep plunging, retailers are panicking.
That was a Fortune magazine title and subtitle from the Nov 11 issue. Just in case you were wondering how the previously cited market commentators came about their bits of conventional wisdom, it's stuff like this that provides the explanation. Instead of relying on the actual data, these stock pickers turned economists are instead gleaning information from eye-catching but factually incorrect media tidbits like this.
To say this was factually incorrect is putting it mildly. How could Fortune run a subtitle that says as sales keep plunging? Consumer spending has been rising. Retail sales have been rising. Chain store sales have been rising. None of these has been going up every month, but they are all trending higher over the past year. So just where does Fortune see plunging sales? A good line, yes. It's a shame the facts don't support it.
Unfortunately, arguments unsupported by facts have become commonplace of late. Watch for the telltale signs: vague comments about consumers being stretched, extended, flat on their backs, overly indebted, etc, etc. Look instead for arguments that are backed up by facts. You will find that the latter are more optimistic than the former, simply because the facts are more optimistic than the conventional wisdom.
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