Regarding consumer confidence: curb your enthusiasm

The Reuters/University of Michigan consumer sentiment index fell again. Every major component of the consumer sentiment index fell. Consumer confidence is inching itself deeper into the recession zone. The summer was a brutal season for consumer confidence.

In September, the consumer sentiment index inched up as the negativity related to the political bickering and finger pointing in Washington D.C. over the debt ceiling crisis started to wear off a little, said analysts at IHS Global Insight.

“The debt issues in Europe, increasing volatility in the equity markets, poor job prospects, and higher consumer prices are starting to chip away at consumer confidence once again,” reported IHS today. 

This is not good news. However, since gasoline prices have fallen, households have some extra money to spend on other things. Consumer confidence is at recessionary levels; however, retail sales are still chugging along. Consumer spending would be significantly higher if consumer confidence were not so low, and if firms were hiring at a faster rate.

What is the logistics and supply chain community to make of all of this? Curb your enthusiasm, and soldier on.