Payday loans and the credit crunch
Somehow, Valentine's Day didn't restore faith in the economy
Consumers don’t have confidence in much of anything nowadays, including traditional banks, which is one reason payday loans are more popular.
The Consumer Confidence Index plummeted in February to a record low. The Consumer Confidence Index has been around since 1967, and this month it hit its lowest mark ever.
Worse than bad
Last month analysts were astounded when the Index hit a significantly low 37.4. But February marked an astounding drop in consumer confidence as the reading plummeted to 25. Analysts had expected the number to be about 35.
Index explained
The Consumer Confidence Index measures consumers’ degree of optimism about the current state of the economy. Basically, this month’s reading means 25 percent of consumers are optimistic about the economy. I guess when people need to get payday loans because their credit and savings have dried up, it doesn’t make them very optimistic.
Psychic pessimism
The Index also calculates levels of optimism regarding the economy’s near future. February that number was 27.5. So about 27.5 percent of consumers think the economy will get better in the next few months. Last month, 42.5 percent of consumers were optimistic about the future. I guess it’s been a rough few weeks.
Getting specific
Consumer confidence is almost as low as Bush's final approval rating of 22 percent
In surveys within the survey, the Conference Board’s Consumer Confidence Index measure optimism about specific factors in the economy.
Findings show that people’s attitudes about the economy are getting worse across the board. Last month 31 percent of consumers expected business conditions to worsen. This month that number jumped to 40 percent.
Also, 47 percent of consumers expect the job market to further deteriorate. That’s 10 percent higher than last month. The Conference Board doesn’t measure how consumer confidence affects payday loans.
It isn’t unexpected – I don’t feel really good about spending on too much these days either. The larger things, like new furnishings, a new car, etc, just do not seem essential anymore. They really weren’t to begin with, in reality, but it is consumer spending that drives our economy. That said, with the job market being what it is these days, keeping up with the Joneses just isn’t important.