American optimism waned as the Index of Consumer Sentiment dropped to a 6-month low in June 2012. The June reading of 73.2 (-6.1) is below the 75.8 monthly average from January 2005 through June 2012 and the largest decrease since August 2011 (-8.0). Consumer sentiment has decisively rebounded from the depths of the Great Recession (55.3 in November 2008).
Some of the good is technology is changing life for the better, American entrepreneurship rises up through the economic headwinds and government disincentives, the economy is muddling along with at least some growth, even with this latest plunge consumer sentiment has increased 9 of the past 10 months, and maybe nothing really bad will happen for awhile.
Some of the bad is technology is changing our life for the worse, drought conditions are affecting some of the U.S., about 1 in 4 households anticipate an improved financial situation during the year ahead, 1 in 7 citizens are on food stamps, 50% of 2012 college graduates are unemployed or underemployed, full employment is far from being restored, the government encroachment in and control of our lives continues unabated, and the national debt rises ever higher and now matches GDP.
Surveys of Consumers Chief Economist, Richard Curtin, said “The overall June decline would normally be consistent with a somewhat slower spending growth rate. The sharp declines among upper income households, however, may have a greater impact on the economy since their spending accounts for a large share of the total. The June loss among higher income households was associated with a large drop in favorable ratings of economic policies and a growing recognition that federal policies to bridge the fiscal cliff will not even be discussed until the very last minute. This meant that they wanted to adopt more cautious spending plans now to protect their finances from potentially adverse developments.”