Photograph by Victor J. Blue/Bloomberg

Customers shop at a Macy’s Inc. store in New York.

That’s the Bloomberg Consumer Comfort Index for the week ended May 12.

The index, which is based on Americans’ opinions about the economy, the buying climate and their own finances, fell from minus 29.5 in the prior week. It can range from plus 100 to minus 100.

In a separate monthly gauge of economic expectations, 32 percent said the economy is getting worse and 31 percent said it’s getting better. The minus 1 reading was the best in five months and rose from minus 4 in April.

“Rising home values and stock prices gains may be underpinning expectations and bolstering consumer spending, which accounts for about 70 percent of the economy,” Bloomberg’s Jeanne Smialek reported yesterday. “Nonetheless, the lagged effect of higher payroll taxes are crimping the discretionary budgets of low- to middle-wage earners, preventing total demand from accelerating.”

Original post is Bloomberg by the Numbers: -30.2 by Political Capital.

Photograph by Victor J. Blue/Bloomberg

A customer browses shoes at a Coach Inc. store in New York.

The outlook for consumer spending may hinge on what 55 percent of American households do next.

That’s the share of respondents who noticed their paychecks had gotten smaller at the start of the year when the payroll tax reverted to the 2010 level of 6.2 percent from 4.2 percent, according to results of a survey commissioned by the Federal Reserve Bank of New York. About 13 percent said their pay increased and the rest noticed no change.

Of those that did see a reduction, a whopping 79 percent said they planned to reduce spending as a result.

The numbers bear watching because of the consistency of responses between surveys. The latest findings represent follow-up questions to a similar poll done in early 2011 that asked what consumers had done with the windfall when the tax was originally reduced.

In the latest survey, the results indicated a household earning $50,000 a year would spend about $380 of the $1,000 in tax savings. That is identical to the findings in the survey two years ago that canvassed a completely different set of households. The rest would either be used to rebuild nest eggs or pay down debt.

Now for the bad news. When the question was reversed this year, the results showed households earning $50,000 a year will cut spending by about $720.

So far, the data suggest households aren’t following through. Consumer spending climbed at a 3.2 percent annual pace in the first quarter, the best performance in two years. Revisions in the retail sales report for April released this week signal the gain will be even bigger when the quarterly figures are updated later this month.

Of course, a big chunk of the jump in spending last quarter was due to a surge in utility use as colder-than-normal temperatures prompted households to turn up the heat. Keeping warm is far from a discretionary expenditure, which means that consumers may soon redouble efforts to make up for that tax increase.

It may also be a case of respondents saying what they think the questioner wants to hear. After all, frugality is now in.

Finally, the 45 percent who said they were doing the same or better may still carry the day.

Original post is Payroll Tax Cut Most Paychecks: Survey by Political Capital.

Photograph by Spencer Platt/Getty Images

Job seekers wait in line to meet with employers at the 25th Annual CUNY big Apple Job and Internship Fair at the Jacob Javits Convention Center on April 26, 2013 in New York City.

Consumer confidence in the U.S. improved in April, reaching a five-month high, a report from the Conference Board showed today.

Chalk up a good portion of the elation to gains in wealth from improving property values and stock portfolios. In fact, 38.6 percent of those surveyed said they expected equities to head higher in the next 12 months, the biggest share since May 2007.

Americans are less sanguine about the labor market. The private research group’s so-called labor market differential — the share of those reporting jobs are currently plentiful minus the share of consumers who say jobs are hard to get — declined to a three-month low.

The outlook isn’t any better, as just 14.2 percent expect there will be more employment opportunities in the next six months, down from a recent high of 19.7 in October.

This indicates the Federal Reserve’s record monetary policy stimulus in the form of $85 billion-a-month in purchases of Treasury securities and mortgage-backed securities is having a bigger bang for the buck on Wall Street than Main Street.

“The Fed’s exceptionally low interest rate policy is boosting asset prices rather dramatically but having a less profound impact on employment and earnings,” economists Mark Vitner and Michael Brown of Wells Fargo & Securities LLC said in a note to clients.

To be sure, higher stock prices tend to make workers feel more secure about their jobs and income prospects, Vitner and Brown said. That was evident in today’s report as the six-month outlooks for jobs and incomes both improved from March.

Original post is Consumer Confidence Up — Not in Jobs by Political Capital.

Photograph by Peter Foley/Bloomberg

Job seekers fill out applications during the NYC Restaurant Job Expo at the Gabarron Foundation in New York, on April 9, 2013.

That’s how many first-time claims for U.S. unemployment benefits were filed in the week ended April 20.

The number represents a six-week low and a decrease of 16,000 from the 355,000 applications for jobless assistance filed the previous week.

“Fewer dismissals show companies have enough confidence in demand and are in a position to add to headcount should sales strengthen after a pause in March,” Bloomberg’s Alex Kowalski reported. “Americans last week grew more confident that their financial situations were improving, indicating rising home values and higher stock prices will help sustain spending and keep the economy expanding.”

The Bloomberg Consumer Comfort Index was minus 29.9 in the week ended April 21, down slightly from minus 29.2 the previous week and marking the first time since January 2008 that the index was above minus 30 in consecutive weeks. The index asks Americans to rate the economy, their personal finances and the buying climate.

“Households were the most optimistic about their finances in 10 months,” Bloomberg’s Shobhana Chandra reported.

Original post is Bloomberg by the Numbers: 339,000 by Political Capital.

Photograph by Victor J. Blue/Bloomberg

Customers try out mattresses in the showroom of an Ikea store in the Brooklyn borough of New York.

That’s the Bloomberg Consumer Comfort Index in the week ended April 14, the highest since January 2008.

The index, which asks U.S. consumers for their views on the economy, buying climate and personal finances, rose 4.8 points from minus 34 in the previous week.

Rising consumer sentiment was “led by upper-middle income earners, deepening a rally already underway among higher-income adults,” Langer Research Associates, which produces the index for Bloomberg News, said in a written analysis.

The Bloomberg Consumer Comfort Index can range from 100 to minus 100. Consumers view their personal finances more favorably than the national economy and the buying climate.

Bloomberg’s Alex Kowalski has more here about the index.

Original post is Bloomberg by the Numbers: -29.2 by Political Capital.

Photograph by Andrew Harrer/Bloomberg

Contractors lay down flooring at a construction site in Lorton, Virginia.

Timing is everything.

Before Election Day, it was reported that the nation’s unemployment fell below 8 percent for the first time in nearly four years.

After Inauguration Day, it’s reported that  the economy contracted, with the nation’s gross domestic product dropping at an annual rate of 0.1 percent in the fourth quarter of 2012, its worst performance since the second quarter of 2009, when the world’s largest economy was still in recession. And a remarkable swing from the third-quarter growth of 3.1 percent.

President Barack Obama rode to re-election in November with a sizable Electoral College majority in an election that was said to be inextricably linked to the health of economy. It turns out the economy was in a stall during that fourth quarter of 2012.

Behind these numbers, there were gains. Consumer spending grew during the quarter. Home sales are rebounding.

“Consumer confidence has been rising, and consumer spending has been rising, but there’s more work to do,” White House press secretary Jay Carney said in his press briefing today, “and our economy is facing a major headwind.”

“I don’t think any time you see a reduction in economic growth that it’s good news, but I think we need to understand what lies underneath it, the sharp drop in particular in defense spending, which is consistent with what we know has been going on in preparation for the possibility of sequester” of Defense Department and other discretionary spending,’ Carney said. “That was the case towards the end of the year when sequester was supposed to kick in on Jan. 1.”

“The broader point, I think, is that — and I think there’s been some reporting to reflect this — that there are — there remain even within this report indications whether it’s housing or consumer spending or business investment that we continue to be poised for positive economic growth and job creation,” he said. “And we need to make sure that in Washington we are not taking actions that undercut that progress that we have been making and can continue to make and will continue to make.”

Democratic activist Brad Woodhouse noted that one economist put the bad news-good news mix this way:

Paul Ashworth at Capital Economics called it “The best-looking contraction in U.S. GDP you’ll ever see.” wapo.st/VnIaCt

— Brad Woodhouse (@woodhouseb) January 30, 2013

The re-elected president’s popularity is up again, at its highest level since his first year in office.

Timing still is everything.

And this president’s party has a lot of time — four more years — to deliver a GDP that looks good on Election Day 2016.

Original post is Obama’s Economy: Timing Everything by Political Capital.

Photograph by Scott Olson/Getty Images

A customer in a show room in Niles, Illinois.

That’s how much the Bloomberg Consumer Comfort Index rose during 2012.

The index, which measures Americans’ perceptions of the national economy, their personal finances and the buying climate, was minus 31.8 in the week ended Dec. 30, compared with minus 44.7 in the week ended Jan. 8. The index ranges from minus 100 to plus 100.

The increase was the biggest in a calendar year since 1998, when the index rose by 14 points, to plus 25 from plus 11.

During 2012, the index ranged from a low of minus 47.4 in mid-August and a high of minus 31.4, reached twice in April.

Despite the rise in the index, it’s still “far below” its long-term average of minus 15.8, “a testament to the still-shaky recovery,” Langer Research Associates, which produces the index, said in a written analysis.

Bloomberg News reported on the index yesterday.

Original post is Bloomberg by the Numbers: 12.9 by Political Capital.

“Even though we’ve not yet even reached the point of the fiscal cliff potentially kicking in, it’s already affecting business investment and hiring decisions by creating uncertainty or creating pessimism,” Bernanke said in response to reporters’ questions today at a Federal Reserve System Board of Governors meeting. “We saw what happened recently to consumer sentiment, which fell presumably in part because of concerns about the fiscal cliff. So clearly this is a major risk factor and a major source of uncertainty about the economy going forward.”

In the economic projections that the Fed’s board has made, he said, “they are assuming… that the fiscal cliff gets resolved in some intermediate way, whereby there is still some fiscal drag, but not as much as implied by the entire fiscal cliff.”

Still, he said, “there’s a lot of uncertainty right now. And if the fiscal cliff situation turns out to be resolved in a way very different from our expectations, I’m sure you would see changes in the forecast.”

Having coined that phrase, he also was asked by Bloomberg’s Peter Cook, does he still feel it’s the most appropriate way to describe what would happen at the start of the year should Congress take no action before then?

“If the economy actually went off the fiscal cliff, our assessment, the CBO’s(Congressional Budget Office’s) assessment, outside forecasters all think that that would have very significant adverse effects on the economy and on the unemployment rate,” he said. “And so, on the margin, we would try to do what we could. We would perhaps increase (the purchases the Fed has been making) a bit.”

“But I just want to, again, be clear that we cannot — we cannot offset the full impact of the fiscal cliff. It’s just — it’s just too big, given the tools that we have available and the limitations on our — on our policy toolkit at this point.”

“People have different preferences about what they want to call things,” he added. “I think it’s a sensible term, because I think of the fiscal policies providing support to the economy, if fiscal policy becomes very contractionary, the economy will, I think, go off a cliff.”

“I think it’s reasonable to be concerned about this,” he said. “I don’t buy the idea that a short-term descent off the fiscal cliff would — would be not costly. I think it would be costly. And in fact, we’re already seeing costs. Why is it that consumer confidence dropped so sharply this week? Why is it that small business confidence dropped so sharply? Why is — why are the markets volatile? Why is business investment among its weakest levels during the recovery?

“I think all of these things, at least to some extent, can be traced to the anticipation and the concern about the fiscal cliff. And I think that, you know, we don’t know exactly what would happen, but I think there is certainly a risk that it could be serious, and therefore, I think it’s very important, the most helpful thing that could — that I  think Congress and the administration can do right now is find a resolution that, on the one hand, achieves long-run fiscal sustainability, which is critical, absolutely critical for a healthy economy, but also avoids derailing the recovery which is currently in process.”

Original post is Bernanke: `Economy Will… Go Off a Cliff,’ if Deficit Cut Too Sharply by Political Capital.

Photograph by Andrew Kelly/Getty Images

Shoppers in New York City.

That’s the year-to-date average of the Bloomberg Consumer Comfort Index, a weekly measurement based on Americans’ views of their national economy, the buying climate and their personal finances.

The index was minus 33.8 in the week ended Dec. 2, the 11^th consecutive week above minus 40, the threshold associated with a troubled economy. The index’s annual average last exceeded minus 40 in 2007, the year before the financial crisis took hold.

The comfort index, produced by Langer Research Associates, can range from plus 100 to minus 100.

Original post is Bloomberg by the Numbers: -38.6 by Political Capital.

Photograph by Victor J. Blue/Bloomberg

Workers build a wing tip for a C-5 cargo plane at the CPI Aerostructures Inc. manufacturing facility in Edgewood, New York.

Updated at 10:45 am EDT

Gross domestic product up.

Unemployment down.

Housing starts up.

Consumer confidence up.

With one more federal report on employment to come the Friday before Election Day, Nov. 6.

All told, a series of indicators on the eve of the 2012 presidential election, a contest virtually tied in national polling and hotly contested in the handful of swing states that will determine the outcome, is favoring the president.

Republican challenger Mitt Romney will campaign in the most pivotal of all states today — Ohio — with an economic message. Romney’s response to the most recent trends has been that things — including unemployment dipping to 7.8 percent at last report, the lowest since Obama took office following the worst recession since the Great Depression — would have been a lot better without President Barack Obama’s insistence on the policies he pursued, such as passage of the health care act which Romney calls a jobs-killer.

Alan Krueger,  chairman of the Council of Economic Advisers, issued this statement from the White House:

“Today’s report shows that the economy posted its thirteenth straight quarter of positive growth, as real GDP (the total amount of goods and services produced in the country) grew at a 2.0 percent annual rate in the third quarter of this year, according to the “advance” estimate released by the Bureau of Economic Analysis.  Over the last thirteen quarters, the economy has expanded by 7.2 percent overall, and the private components of GDP have grown by 10.1 percent. While we have more work to do, together with other economic indicators, this report provides further evidence that the economy is moving in the right direction.

The economy expanded more than forecast in the third quarter, paced by a pickup in consumer spending, a rebound in government outlays and gains in residential construction, as Bloomberg’s Shobhana Chandra reports today.

Gross domestic product, the value of all goods and services produced in the U.S., rose at a 2 percent annual rate after climbing 1.3 percent in the prior quarter, Commerce Department figures show.

And a housing rebound is helping mend Americans’ finances and confidence, indicating the pickup in demand for expensive items such as automobiles can be sustained, Chandra reports, adding: The data is likely to play a role in the upcoming election, allowing Obama to say the economy is heading in the right direction, while challenger Romney argues the growth is not fast enough.

“The household side is doing better, that comes through pretty clearly,” says Dean Maki, chief U.S. economist in New York for Barclays Plc, who correctly forecast the rate of growth. “Housing, which was in a deep hole, is also expanding. The fact that both of these are improving is an encouraging sign.”

Original post is Economic Indicators at Election Eve — White House: `Right Direction’ by Political Capital.