Consumer Confidence: From Sizzle to Fizzle

The Lehmann Letter (SM)

When you look at the chart you can see that consumer confidence popped back nicely from recession’s deep trough. That sizzle is now fizzle. Economic expansion can’t proceed with exuberance while consumer confidence is mired in the doldrums.
Consumer confidence has stalled. The long climb out of recession’s trough has reached a plateau, and that’s bad for consumer demand.
This morning the Conference board reported “…the fourth consecutive moderate decline…” June’s index-value was 62.0
The problem is not so much decline. The index is essentially flat. But there’s no need to quibble. The index has to rise through 100 to prove we have a robust recovery. Just rising through 80 would be welcome.
Consumer Confidence
(Click on chart to enlarge)

(Recessions shaded)
What’s wrong? Household balance sheets (as this letter believes)? Unemployment, the euro, the stock market, etc. (as others believe)? Why argue? We can probably all agree that we have a problem.
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© 2012 Michael B. Lehmann