Consumer Sentiment: Is the Worst Yet To Come?

Finding Bottom Is A Process

"There have been four consecutive months of negative job growth. I spoke of this in April Jobs - Another Report From Bizarro World.

Consumer sentiment is unlikely to improve until jobs improve.

However, don't expect that to happen anytime soon. Banks and brokerages are scrambling to raise capital and reduce expenses. Layoffs in the financial sector are massive, but are about to get worse. State budgets are strapped and many states are reporting dramatic falloffs in tax revenue. California is in particularly dire straits as noted in California Leads Way To Consumer Bust. States will have to raise taxes or cut services (jobs), most like both.

Commercial Real estate will add to the downward spiral now that the Shopping Center Economic Model Is History. The auto sector is in deep trouble thanks to the Death of the SUV.

Those buying into the idea of a "second half recovery" are singing the wrong tune. Overcapacity is rampant everywhere you look. There is no reason for businesses to expand, so they won't. Thus, unemployment is poised to rise and consumer sentiment is poised to sink further..."