I stared, mystified, at the recent headline in the paper: “Consumer Confidence Stays Steady.” To rip off Seth Meyers, “Really, consumers? Really??” Based on what?
I admit, I’m not an economist who finds all that much meaning in the GDP, productivity figures, inventory levels, factory outputs and other charts, tables and indices. But from where I sit, there isn’t much to support that steady confidence. Joblessness is pretty much where it has been. The Dow is back over 10,000 but seems to be clinging there, desperately. Gas prices are on the rise. (Must be getting close to summer.) Housing starts are dismal. Auto companies are shutting plants one after another. And the one reliably solid-selling motor brand, Toyota, well, its sales are about the only thing that has braked successfully.
And while monthly reported retail sales bounce up and down, they never bounce too high and they always seem to bounce down again.
So why are consumers confident? I posit two answers: One, they need goods. And two, they need to feel good. The “need goods” factor is palpable and powerful. After a year and a half of denial, people simply need to replenish their closets and their larders. Houses need repair. Kids need clothes.
But in this rebound, says The New York Times, consumers are starting to buy clothes, jewelry and even cars again. Which brings me to the “need to feel good” factor that, while more ephemeral, is what has driven retail sales since Montgomery Ward sent out its first dry goods catalog. People seem to get a rush out of going to the store and buying something for themselves. Especially this current generation of Americans, who spent boundlessly for nearly a decade until that horrible uh-oh moment in the fall of 2008. (Surely you remember AIG, Citibank and Bernie Madoff. It was in all the papers.) You can suppress that need to self-indulge for only so long.
And now, apparently, all those too-big-to-fail bankers have those year-end bonuses in their pockets and are heading for Saks, Tiffany and the Lexus showrooms.
So Whole Foods (overpriced tomatoes), Starbucks (overpriced coffee) and Apple (new and improved but overpriced iGadgets) are sticking their noses out of their holes again and seeing their shadows. American consumers, who have no particular reason to be optimistic except that they’re American consumers, are saying to themselves, “I’m good enough, I work hard enough and, doggone it, I deserve it!” (Okay, another “Saturday Night Live” rip-off. Well, excuuuuse me! But isn’t that what SNL is for?)