As Bloomburg reported, consumer confidence “unexpectedly” fell in May by the most in more than two years. Americans seemed worried on all fronts.
The University of Michigan preliminary index of sentiment dropped from 95.9 to 88.6 in May. The resulting outcome was lower than “the lowest estimate of 68 economists surveyed.”
A stalled U.S. economy and a rise in fuel costs added to the gloomier perceptions.
Furthermore, the decline in perceptions “was widespread among all age and income subgroups as well as all regions of the country.”
Writing for Market Watch, Quentin Fottrell reports that about half of college graduates expect to be supported financially by their parents for up to two years after graduation. And almost half of students surveyed said they would be willing to pay their parents rent if they moved back home post-graduation. Only 5 percent of parents say they would not let their child move back in with them after graduation.
In the Upromise survey by Sallie Mae, the student lender, only 2.8 percent of parents expect their children to have a full-time job after college and only one-quarter see them having any kind of job in their chosen field when they graduate.
Joyce Serido, assistant research professor at The University of Arizona, carried out a study, “Arizona pathways to life success for university students.”
In her study, almost one-third of graduates expect to receive some support for six months and another third expect help for up to two years.
The inability to stand alone financially appears to impact other life ambitions as well. “Some 28 percent say marriage is not an important life goal, while 19 percent say the same about home ownership.”
The effective unemployment rate for 18- to 29 year-olds, which adjusts for labor force participation by including those who have given up looking for work, was 13.8 percent in April according to Generation Opportunity, a Virginia-based think tank.
In another area of the economy, industrial production fell in April for the fifth straight month, a sure sign that economic weakness experienced at the start of the year has continued into the second quarter.
Industrial production declined 0.7 percent from January through March and mining output dropped 0.8 percent in April – the fourth straight monthly decline.
The mining drop this year has been caused by “a sharp fall in oil and gas well drilling,” according to the Federal Reserve.
Drilling decreased 14.5 percent in April and was down 46.5 percent from a year earlier.
All this proves is the weak economy is not “unexpected.” There is no strong job growth regardless of the government’s touted unemployment rate of 5.4 percent. Remember there are 94 million Americans not working. In Hawaii, one can make $60,000 sitting on their hands. In Oklahoma the figure is $22,000.
The Federal Reserve’s plan to raise interest rates this year based on untruthful data is on hold. The winter lull which the administration used as an excuse for a stalled first quarter is now a reality.
The economy is going nowhere based on sagging retail sales, a lack of consumer confidence, a huge trade deficit and stagnant industrial output.
If the Fed really wants to kill the economy more than the Obama administration already has, it can raise rates and lose everything.