Economists need to listen to consumers
2008-06-25 16:08:24 (GMT) (Caymanmama.com - Business News)Houston, Texas (CaymanMama.com) — Both economists and consumers think differently when it is the issue of economy. It seems both consumer and economists strongly disagree about the way economy is proceeding. However, a recent consumer survey had 5,000 people surveyed by the Conference Board and it was found that the analysis gave a bleak result for the past six months for the past 42 years in the history.
According to consumers, business conditions are deteriorating instead of improving. In this survey, all those who expected a job cut topped the list of polls in comparison to all those who thought about improvement in the job market.
According to the reports made by this survey, it seems that the economists feel it is somewhat right to take heed on public views. According to Keith Hembre, First American Funds chief economist, “I would guess that the consumers are going to be right.” He added that due to the constant increasing prices, increasing unemployment, job cuts and poor housing market, it is inevitable that the economy is at its bad phase. Hembre said, “Those four headwinds are not fading.”
The director at Consumer Research Centre at Conference Board, Lynn Franco, said that with the consumer survey, they may change their plans on making any big purchases. The only item that is on the purchase list of Americans is air conditioners. There are many few takers for vacations. Hembre added that amidst all this, consumer spending has shown strong sign against the economic problems of the past year.
However, for Bernard Baumohl, Economic Outlook Group’s executive director said that consumer spending has been strong because of a tax rebate of $100 billion and in the present year, the spending seems poor. He added, “Households cannot escape the grim reality.” Economists believe that if the consumer spending declines, it will add to the economic slowdown.
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