We had a quiet weekend at home for Memorial Day, and spent the time catching up and visiting with family. Did gas prices keep us from traveling? No, not really, although we are driving less. It was just time to enjoy being home and getting some things done that we’ve been putting off.
We did change our travel plans for the summer however. Instead of driving across the country in a small RV, we’re now flying. It wasn’t a hard decision- we actually found round trip airfare for less than a third of what it would cost to drive the same distance. So this way we’ll have more time once we get there, and save money as well. Up until a few weeks ago the price was comparable either way. But as gas prices have risen, driving became more expensive. Then we found some really cheap fares to fly, so that made it an easy decision.
I would like to have driven though- and stopped at different towns across the country to see how folks are doing out there. Some of our relatives have been on the road for over four weeks and said people seem busier than ever. But reading the news this morning it seems that consumer confidence has dropped to a 15 1/2 year low as reported by the Conference Board Consumer Confidence Index.
The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. Says Lynn Franco, Director of The Conference Board Consumer Research Center:
“The Consumer Confidence Index now stands at a 16-year low (Oct. 1992, 54.6). Weakening business and job conditions coupled with growing pessimism about the short-term future have further depleted consumers’ confidence in the overall state of the economy. Consumers’ inflation expectations, fueled by increasing prices at the pump, are now at an all-time high and are likely to rise further in the months ahead. As for the short-term outlook, the Expectations Index suggests little likelihood of a turnaround in the immediate months ahead.”
Consumers’ appraisal of current conditions grew more pessimistic in May. Those claiming business conditions are “bad” rose to 30.6 percent from 26.5 percent, while those claiming business conditions are “good” decreased to 13.1 percent from 15.4 percent last month. Consumers’ assessment of the job market was also more downbeat. The percentage of consumers saying jobs are “hard to get” was virtually unchanged, 28.0 percent versus 27.9 percent in April. Those claiming jobs are “plentiful” declined to 16.3 percent from 17.1 percent.
Last week the University of Michigan Consumer Sentiment Survey fell to a 28 year low. Not since 1980 have consumers felt so negatively about the economy.
It’s not hard to understand why with the challenges we’ve faced over the past year. And with gas prices posting record price increases for over 20 straight days, it makes you wonder what’s really going on. It’s like there’s a buying frenzy taking place… kind of like the dot-com boom except this time with oil and energy commodities.
But for most of us it is what it is. We’ll have to deal with it until the government figures out a workable response. Over the past few months, U.S. drivers have indeed cut back on driving, but it hasn’t put a dent in gas prices yet.
But the Fed is reporting that the credit crunch is easing, and even home sales actually increased a little in April. But sales activity is still very slow and the price of single-family homes has fallen quite a bit over the past year.
Do you lie in bed at night worrying about home prices? Most people don’t. We live in a house, and usually plan to be there for a while. For me it’s a decade or longer asset, and not something we plan to borrow money from. But if you’re trying to move or sell a house, it must be a difficult time.
The economic challenges will continue to affect most of us for some time. Unless energy prices moderate soon, it’s going to get a lot tougher out there.
Sphere: Related ContentNo comment - Post a comment
« The Oil Conundrum Part II: The Blame Train | Thoughts on Long-Term Care Insurance and Medicare »
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/charts/metals/gold/t24_au_en_usoz_2.gif)
