If Americans do as they say, this may be a summer of conspicuous nonconsumption.
The consumer confidence figures released last week showed that pessimism about the economy is at historic highs, and that plans to take vacations or make major purchases are at some of the lowest levels ever recorded.
That dire outlook has yet to be fully reflected in the economic statistics, however. It may be that some consumers are not really as worried as they say, or perhaps the economic stimulus tax rebates sent out this spring made it easier for consumers to keep buying other things even while they coped with US$4-a-gallon gasoline.
PHOTO: AP
One question the Conference Board has been asking for decades is whether Americans think their own income will increase or decrease over the next six months.
Most expect no change, and that has been true throughout the survey’s history. But until now, there have always been more who expected improvement than who thought they would earn less.
But the Conference Board, in its preliminary report for June, stated that its survey showed 12.3 percent expected their income to rise, while 15.9 percent expected a decline. That is the highest level ever for pessimism, and the lowest for optimism.
The proportion of optimists always falls during recessions. But in recent years, it has not recovered as it did after the two recessions in the early 1980s. Then, the level of optimism bounced back quickly. It took years after the 1990-1 downturn for optimism to recover to the level just before that recession began.
After the 2001 recession, optimism never did get back to pre-recession levels.
The Conference Board bases its expectations index on the answers to that question and two others. Those questions ask whether business conditions are likely to improve, and whether there will be more jobs, over the next six months.
In the June survey, 33.9 percent forecast business conditions would worsen and 35.5 percent think there will be fewer jobs. Both figures are the highest since the early 1980s. Fewer than 10 percent expect improvements in either area.
As a result, the expectations index, which stood at 94.4 last July, is down to 41, a record low. In terms of how they see the present situation, consumers still give more positive responses than they did in mid-2003. But at no time since the survey began in 1967 have they been less confident about the future.
The Conference Board’s survey also asks about buying intentions, although the answers to those questions do not affect the consumer confidence index. Car-buying intentions are at their lowest level ever, while fewer people plan to buy homes than at any time since 1982, when soaring interest rates devastated the housing market.
Americans may not want to buy a new home, but most say they are happy to stay close to their old one.
In the June survey, 35.8 percent of respondents said they planned to take a vacation in the next six months, including 18.9 percent who planned to drive rather than fly or take a ship. Both figures are the lowest since the Conference Board began asking the question in 1978.
The US government has signed defense cooperation agreements with Japan and the Philippines to boost the deterrence capabilities of countries in the first island chain, a report by the National Security Bureau (NSB) showed. The main countries on the first island chain include the two nations and Taiwan. The bureau is to present the report at a meeting of the legislature’s Foreign Affairs and National Defense Committee tomorrow. The US military has deployed Typhon missile systems to Japan’s Yamaguchi Prefecture and Zambales province in the Philippines during their joint military exercises. It has also installed NMESIS anti-ship systems in Japan’s Okinawa
‘WIN-WIN’: The Philippines, and central and eastern European countries are important potential drone cooperation partners, Minister of Foreign Affairs Lin Chia-lung said Minister of Foreign Affairs Lin Chia-lung (林佳龍) in an interview published yesterday confirmed that there are joint ventures between Taiwan and Poland in the drone industry. Lin made the remark in an exclusive interview with the Chinese-language Liberty Times (the Taipei Times’ sister paper). The government-backed Taiwan Excellence Drone International Business Opportunities Alliance and the Polish Chamber of Unmanned Systems on Wednesday last week signed a memorandum of understanding in Poland to develop a “non-China” supply chain for drones and work together on key technologies. Asked if Taiwan prioritized Poland among central and eastern European countries in drone collaboration, Lin
The Chien Feng IV (勁蜂, Mighty Hornet) loitering munition is on track to enter flight tests next month in connection with potential adoption by Taiwanese and US armed forces, a government source said yesterday. The kamikaze drone, which boasts a range of 1,000km, debuted at the Taipei Aerospace and Defense Technology Exhibition in September, the official said on condition of anonymity. The Chungshan Institute of Science and Technology and US-based Kratos Defense jointly developed the platform by leveraging the engine and airframe of the latter’s MQM-178 Firejet target drone, they said. The uncrewed aerial vehicle is designed to utilize an artificial intelligence computer
Renewed border fighting between Thailand and Cambodia showed no signs of abating yesterday, leaving hundreds of thousands of displaced people in both countries living in strained conditions as more flooded into temporary shelters. Reporters on the Thai side of the border heard sounds of outgoing, indirect fire yesterday. About 400,000 people have been evacuated from affected areas in Thailand and about 700 schools closed while fighting was ongoing in four border provinces, said Thai Rear Admiral Surasant Kongsiri, a spokesman for the military. Cambodia evacuated more than 127,000 villagers and closed hundreds of schools, the Thai Ministry of Defense said. Thailand’s military announced that
RSS