Hampel to Forbes: Holiday gloom is misplaced
MADISON, Wis. (11/17/09)--Although the most recent reports on consumer sentiment have not been great, it should not be taken as sign that retailers will suffer from a poor holiday shopping season, a Credit Union National Association economist (CUNA) told Forbes.com Friday.
The holiday season is generally a time when consumers suspend their worries, Bill Hampel, CUNA senior economist told Forbes. Also, the weak consumer sentiment figure is likely based on the most recent unemployment reading rising to 10.2%, which engenders the perception that getting a job is difficult, he added.
"It's not just about the unemployment figure or the 17.5% of workers who are underemployed," Hampel said. "It's also about the 83% of people with jobs worried that they'll join them."
Friday's University of Michigan consumer sentiment reading of 66 is down from October's 70.6--the worst since August.
"We've come a long way," Hampel said, in referring to the Michigan sentiment survey's rebound from its 2008 lows. A year ago, the index was at 55.3, just a few months after Lehman Brothers collapsed and the U.S. economy was entering the worst period of the recession, Forbes said.
The economic downturn's speed and severity has made businesses leery about a recovery and "is contributing to a substantial disconnect between the more guarded forecasts coming out of corporate America and more confident recovery talk from many economists and members of the investment community," Forbes said.
The reason for this is that economists and market watchers don't necessarily have people's livelihoods connected to their outlooks, Hampel told Forbes.
CUNA will join the Consumer Federation of America Monday to release the results of their annual consumer spending survey.
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