Is it still called Consumer Confidence?

Brokers, bankers and pundits have been talking a lot, lately, about when “the market will find its’ bottom.” With due respect to the Wall Street big-shots, I’ve got my eye on a more important bottom: Today (NY Times 10/29/08), “Consumer Confidence” has hit the lowest level on record. (So why aren’t they calling it consumer-lack-of-confidence?)

Now, I’ve never considered myself a futurist. But I am an optimist… and I do think there are a number of reasons to have hope over the next few months. And yes, I realize that this list is composed of largely emotional attributes/events.

This is the week before the election, and there’s all kinds of bickering going on between politicians. It’s easy to get bummed out with so much trash talk flying around.

The election is next week. Setting aside political preferences, one thing is certain: Next week is the beginning of a beginning, with a new administration. There should be a sense of “clean slate.”

The holidays are coming. People seem to have accepted that gift-related spending will be lean. (That is bad news that’s already been reported.)

Energy prices have fallen. At least in the short term, that’s some good news for consumers. And while it won’t likely been seen in price reductions at grocery or other retail, lower gas prices help people manage cost increases in other areas of their life. (Nothing like the threat of a global recession to humble an oil baron.)

A realtor in the Midwest tells me that people are coming back to the housing market again (unable to avoid the bargains that are out there).

The New Year is just over sixty days away. That provides another “fresh start” frame of mind.
Even if there is more grim economic news, the shock value of bad news is beginning to wear off. We have been hearing that the sky is falling for most of 2008—and if you’re a hedge fund manager, perhaps it has fallen. But most people will realize they can adapt, survive, and hopefully even thrive over the long haul.

Implications: Things have been stirred up for a while now… and the water is murky. But soon, people will be yearning for a little good news. Can you provide that hope? Is yours a product or service that will benefit from the concept of “pent-up demand,” once the headlines contain hope? Perhaps “when consumers are spending again,” they won’t be spending as much as they did in the heyday of the post-2002 recession. But spend, eventually, they will.

If you’ve been part of the workforce for more than a few years, you know one thing about bad news and recessions: None of them is permanent. While it’s important to pay attention to business conditions, adjusting expenditures accordingly, it is also important to beware of the early signs of a turnaround. Timing is everything. Being late with a response to recessionary economics can be very costly for a company; but so can it be expensive to recognize too late that a recovery is at hand.

I make that statement not as a prediction… but as a precaution.

You know, it’s funny. I was just about to click “save” on this article… and I got another email alert from the NY Times. The up-and-down stock market is up again, by more than 900 points. Even the speculators are getting tired of it all.

Mike Anderson