Consumer confidence lowest since 2021

[ua_guy]

https://www.cbsnews.com/news/consumer-confidence-index-plummets-february-2025/

U.S. consumer confidence plummeted in February, the biggest monthly decline in more than four years, a business research group said Tuesday, with inflation seemingly stuck and a trade war under President Donald Trump seen by a growing number of Americans as inevitable.

Welp, it was good while it lasted. I wonder specific factors contributed?

[myrdale]

https://www.cbsnews.com/news/consume...february-2025/



Welp, it was good while it lasted. I wonder specific factors contributed?

Probably the price of eggs.

[ua_guy]

Probably the price of eggs.

On the flip side, this probably means interest rates will be cut shortly. While that could be good, low interest rates tend to drive up prices and increase personal debt.

[disneysteve]

On the flip side, this probably means interest rates will be cut shortly. While that could be good, low interest rates tend to drive up prices and increase personal debt.

I thought they lower rates when inflation is under control and raise them when it’s not. Why would rates come down with rising inflation?

[ua_guy]

I thought they lower rates when inflation is under control and raise them when it’s not. Why would rates come down with rising inflation?

Prices are being driven up by tariffs. Consumer spending (confidence) has been lessened by recent economic uncertainty. Higher prices, lower consumption = faltering economy. Interest rates are no longer cooling a strong economy, so the fed is likely to cut them to aid consumer spending and generate more demand for goods. That's my primitive understanding, anyway.

[disneysteve]

Prices are being driven up by tariffs. Consumer spending (confidence) has been lessened by recent economic uncertainty. Higher prices, lower consumption = faltering economy. Interest rates are no longer cooling a strong economy, so the fed is likely to cut them to aid consumer spending and generate more demand for goods. That's my primitive understanding, anyway.

Makes sense. They don't need to cool a great economy anymore because those days are over now, as we have previously discussed they would be this year. Now every time I turn on the news, I hear about big layoffs, a record number of store closings anticipated this year, rising inflation, trade wars, falling stock prices, and more. The economy is likely in for a rough ride the next few years.

[myrdale]

Prices are being driven up by tariffs.

What tariffs? 10% on China? That's only been in place for a couple of weeks. There are no tariffs on Canada and Mexico, and there won't be assuming those countries secure their borders. Prices are being driven by a weakened dollar due to inflation over the last four years.

2016 1.3%
2017 2.1%
2018 2.4%
2019 1.8%
2020 1.2%
2021 4.7%
2022 8.0%
2023 4.1%
2024 3.2%

[disneysteve]

Prices are being driven by a weakened dollar due to inflation over the last four years.

As your numbers show, over the past 3 years the inflation rate actually came down sharply. The problem is it’s now climbing again due to current actions and policies. The unemployment rate, which had been historically low in recent years, is also climbing which is going to cost the country billions in lost revenue and productivity.

[ua_guy]

What tariffs? 10% on China? That's only been in place for a couple of weeks. There are no tariffs on Canada and Mexico, and there won't be assuming those countries secure their borders. Prices are being driven by a weakened dollar due to inflation over the last four years.

10% on china, 25% on steel and aluminum.

How much/how many consumer goods come from China, and where do we think metal comes from in vehicles, buildings, bridges, food containers, etc?

Edit:
25% Canada/Mexico tariffs +10% for a total of 20% on Chinese goods have been announced for March 4th. Wait and see, I guess, or are these more idle threats?

[myrdale]

Wait and see, I guess, or are these more idle threats?

I don't think it is idle threats. Illegal immigration and drug trafficking in the United States of America have been an on going problem forever. This administration has made it clear they intend to resolve the issue. Canada and Mexico have been put on notice that they need to do more to limit the issue. If they don't want to help resolve the problem then the tariffs will be implemented. It's their choice.

[myrdale]

As your numbers show, over the past 3 years the inflation rate actually came down sharply. The problem is it’s now climbing again due to current actions and policies. The unemployment rate, which had been historically low in recent years, is also climbing which is going to cost the country billions in lost revenue and productivity.

The numbers have not come down. Saying 8 to 4 to 3 is hardly "coming down" when the previous four years were 2.5 as a high. Cumulatively it's 20% vs 5 or 6% over the last four years.

[ua_guy]

I don't think it is idle threats. Illegal immigration and drug trafficking in the United States of America have been an on going problem forever. This administration has made it clear they intend to resolve the issue. Canada and Mexico have been put on notice that they need to do more to limit the issue. If they don't want to help resolve the problem then the tariffs will be implemented. It's their choice.

Nah, this is economic theater. There are no specific incremental goals or specific demands to be met in order to avoid tariffs on Canada and Mexico, so it's an arbitrary moving target. The economy is suffering for it, and consumers aren't putting up with it. I totally agree with you, drug trafficking should be addressed to a higher degree and financial resources should be contributed by our bordering countries. But those things are already happening, and have been happening.

The whole notion of punishing other countries for their lack of commitment in resolving illegal drug trafficking would make sense if it didn't hit Americans directly in the pocket book. We're being punished for it, and 99.9% of us have absolutely nothing to do with it. The issue doesn't affect me.

[disneysteve]

The numbers have not come down.

If you can’t comprehend that going from 8 to 4 to 3 represents substantial improvement then intelligent discussion simply isn’t possible.

Let’s see what you say when it goes back to 8 or 10 or worse. Will you also say that doesn’t represent an increase?

[myrdale]

If you can’t comprehend that going from 8 to 4 to 3 represents substantial improvement then intelligent discussion simply isn’t possible.

That is a rate. To represent "coming down" it' would have to be -5 to -20%. I am sorry you can't comprehend that.

[myrdale]

We're being punished for it, and 99.9% of us have absolutely nothing to do with it.

We're being punished for decades of wasteful government spending. Hopefully those days are numbered.