Long Island Consumer Confidence Confounds

As reported in the Long Island Business News, The Sienna Research Institute is claiming that Consumer Confidence on Long Island rose by 9 percent in the third quarter over the previous period. This seems to conflict with recent reports that Long Island's economy is still in the toilet, that there are no signs of the recovery that is supposedly taking place in the greater economy. This I believe. But consumer confidence increasing?

The core group of respondents must either be from the financial sector or the public sector. But seriously, I am still having trouble believing how an economy driven by consumer spending can recover when so many of those consumers are unemployed. It is simple math. The population of the United States is 300,000,000 comprising about 100,000,000 households. Over 7,000,000 jobs have been lost since the recession officially began 22 months ago. 7,000,000 jobs lost affects the finances of almost as many households, allowing for those that have, sadly, lost more than one job.

We must also count the millions of households who are affected by underemployment or have fallen below the radar. So, all told that is at least 10% of households not spending like they used to. The economy has been driven by 70% consumer spending over the last 10 years. A 10% reduction in consumer spending is a huge hit, accounting for trillions of dollars of our economic engine. There are also the millions of households who are in fear of losing their jobs and they are not spending like they used to, either.

In fact, the best numbers that have come out so far are those of consumer debt reduction. People are not spending, they are paying down debt and conserving. Wages continue to be stagnant and companies continue to cut jobs, albeit at a slower pace, in order to present better quarterly numbers but that is by no means a true gauge of health. I will certainly feel better and look better when I stop eating for a while but if I stop eating for too long, I may not survive.

Given all of these developments, it is hard to see where the consumer is finding any confidence especially in high cost Long Island where, unfortunately, those costs are closing in for many. I have completely lost my confidence. I don't even want to go to the store at all. But, since I am not the biggest consumer to begin with, I am always behind in necessities and so I remain. I know we are all looking for light at the end of the tunnel and we definitely need it soon. Even I am running out of patience.