Confidence, consumer, investor, and business, is key - let's focus on the consumer. The one that accounts for roughly 17% of global GDP - i.e., the U.S. consumer - remains afflicted by excessive debt burden and record unemployment. In contrast, consumer confidence is rebounding smartly in other parts of the world, developed and developing.
Advanced consumers showing some confidence, but the U.S. consumer confidence index remains 39% below that during the onset of the recession.
The chart illustrates various measures of consumer confidence across a selection of advanced economies (you can see the exact sources here). Consumer confidence in the U.S., U.K., Germany, and Ireland remain well short of their Jan. 2008 levels. Notably, confidence in the U.S. has moved laterally since May 2009 despite recent gains in the fourth quarter of 2009.I wanted to add just a few comments to this post regarding the "not uniform" part of the Angry Bear title. Ostensibly (in the chart), consumers in some advanced economies - Australia, Spain, Italy, and Tokyo - are "feeling" better off than those in the U.K., U.S., and Germany...in levels, that is. But with the exception of Australia, the recent trend is admittedly less sanguine. Let's see why.
From the Conference Board (U.S.):
"Consumer Confidence rose for the third consecutive month, primarily the result of an improvement in present-day conditions. Consumers' short-term outlook, while moderately more positive, does not suggest any significant pickup in activity in the coming months.From the GfK Group (Germany):
German consumers are assuming that the German economy is slowly recovering from the recession, a view that is shared by many experts. However, small set-backs cannot be ruled out, and economic expectations have consequently stagnated in January.From Nationwide (U.K.):
Although it is still early days, these lower expectations may foreshadow a more sluggish consumer outlook in 2010 as stimulus measures are withdrawn.”From the Westpac Group (Australia):
Four of the five components of the Index increased in January. All components are seasonally adjusted. Assessments of “Family finances compared to a year ago” increased by 5.2%; expectations about family finances “over the next 12 months” increased by 10.5%. Expectations for “Economic conditions over the next 12 months” rose by 6.8% although expectations for “economic conditions over the next 5 years” fell by 2.1%”. Opinions on whether it is a “good time to buy a major household item” rose by 7.7%.Cheery Australia is certainly the odd-man-out. At least in the latest reports, it is the expectations index that is dragging confidence in the U.S., Germany, and the U.K. Ick, not good for spending nor growth.