Consumer Confidence Waning Economists Say They Are Vexed by Flood of Mixed Signals and Unreliable Statistics

By Amy Kaslow, writer of The Christian Science Monitor | The Christian Science Monitor, October 19, 1990 | Go to article overview

Consumer Confidence Waning Economists Say They Are Vexed by Flood of Mixed Signals and Unreliable Statistics


Amy Kaslow, writer of The Christian Science Monitor, The Christian Science Monitor


CHARLIE LEMMER, owner of Chazco Van Lines, heaved a sigh and leaned on the furniture his men had just moved. He started his Virginia-based moving business in 1980, and until this year, he enjoyed the boom years of the Washington metropolitan housing market.

But "since the beginning of this year," he says, "the slow times have been really slow, and we've had to spend more money and work harder to make the same revenue."

With higher costs and less business, Mr. Lemmer is considering layoffs. Parents of two, he and his wife used to frequent shopping malls; today, he says, they're very careful about what they spend. "People are afraid to spend money, and they're putting off making moves and buying furniture. If I knew what the next year was going to bring, I wouldn't be worried."

According to recent surveys, Lemmer is joined by a majority of Americans who are uncertain about the nation's economy. A recent New York Times poll reveals that seven out of 10 American consumers lack confidence.

Their recession fears are compounded by mixed signals from economic experts, who offer no clear picture of what lies ahead.

Economists are vexed by so many unknowns - the threat of war, the volatile oil market, the extent of divestment from US securities by foreign investors, a federal-budget impasse, and an elusive Federal Reserve Board policy on interest rates - they admit that forecasting is tougher than ever.

Given the unstable environment, says a Commerce Department analyst, statistics that show present economic activity are increasingly discounted in projecting future developments.

"It's unusual that we have so many things (economic indicators) that are hard to read. Most of the 11 leading economic indicators - such as stock prices, industrial production, and contracts and new orders for plants and equipment - are unpredictable," he says. "These indicators have been moving around a great deal - up and down during the past months."

"People were talking about a recession a year ago, but we still haven't had ... months of negative growth associated with a recession," he adds.

In August, the index of leading indicators dropped 1.2 percent, the most dramatic monthly fall since the jolt caused by the Oct. 19, 1987, stock market plunge.

Many sectors of the economy have been weak "for a long time," says Lea Tyler, a senior economist with Wharton Econometrics in Philadelphia. Barring war and higher oil prices, she predicts a mild recession in a few months' time.

Roger Kormendi, a professor of Business Economics at the University of Michigan, says that current analysis comes largely "from business economists trained a long time ago in forecasting methods that are now archaic. We can no longer forecast from past trends, because economies are fundamentally changing."

Consumer confidence is clearly waning. University of Michigan's Index of Consumer Sentiment - a barometer of consumer confidence - plummeted 25 percent from April to August.

"Consumers believe their conditions are going to be worse and there is tremendous uncertainty," says Professor Kormendi. This leads consumers to tighten their purse; less spending means a slower economy.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Consumer Confidence Waning Economists Say They Are Vexed by Flood of Mixed Signals and Unreliable Statistics
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.