Filed under: News, Politics, President Obama
In case you're not aware, Consumer Confidence is a measure that captures the degree to which the American people feel good about their economic futures. It is studied by economists around the world, and is one of the most important indicators of an economy's direction.
You could be wondering why something as simple as confidence might play a role in the direction of the economy. After all, isn't confidence simply a psychological phenomenon? To some extent, it might be, since none of us truly knows what the future holds. However, confidence plays a role, not just in revealing what we expect from the future. It also plays a role in how we prepare for that future.
A confident consumer is one who spends money. He/she feels good about job prospects, job security and long-term earning potential. Confident consumers buy homes, refrigerators and the new car they've been wanting to get. Confident businesses make investments and hire additional workers. That's why confidence matters, and that's one of President Obama's biggest problems right now.
Americans are not feeling good about the economy. Consumer confidence dropped in July to its lowest level in nine months, according to The University of Michigan. Consumers are being most affected by the job market and high debt levels. They are also surprisingly affected by the lack of leadership in Congress, where jobs bills are delayed until the last minute due to Republican opposition.
"What changed in July was their recognition that the anticipated slowdown in the economy will keep jobs scarce for some time, while their uncertainties about future prospects were increased by the policies of the Obama administration," said Richard Curtin, director of the survey.
Only 14 percent of consumers say that the government is handling the economy effectively. Much of this falls onto President Obama, who is seen as the figure head of our government, although Congress plays a critical role in seeing that bills are passed.
Another huge problem for the president is that many Americans feel that his policies are not creating jobs. The American unemployment rate remains above nine percent, in spite of efforts to reduce it. He is also affected by the rising debt burden of the United States government, which serves as justification for Republican efforts to say "no" to jobs bills proposed by the Democrats.
What will be especially interesting is how the Obama Administration handles things after the mid-term elections. Should the Republicans make strong gains in the House of Representatives and the Senate, it will be even more difficult for the president to get his legislation passed, which will likely affect his bid for re-election.
Dr. Boyce Watkins is the founder of the Your Black World Coalition and a Scholarship in Action Resident of the Institute for Black Public Policy. To have Dr. Boyce commentary delivered to your email, please click here.