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CUNA chief economist Bill Hampel weighs in on his outlook for consumer confidence.
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Okay let's talk consumer confidence it.
Taken a big hit in May it's -- largest plunge since January joining us now the chief economist for the Credit Union National Association.
Bill Campbell.
-- -- -- down house and a wife three months in a row are Americans too whiny.
They don't -- -- -- hold onto a thought for too long do they they they changed her mind quite a bit act actually -- you know consumer confidence.
Rose really sharply in February.
And we've been holding those gains since and we've basically given back half of those gains.
I think I think if you look at the stresses that the consumers are having to respond to.
Especially when we've just been talking about now what's going on internationally -- worth we're energy prices up until recently.
It's not surprising and the stock market is not surprising that they're they're giving a little bit -- about their confidence.
However I I think it's going forward for the next few months the fundamentals they face are gonna continue to -- -- -- we'll see some return of consumer confidence yet that's.
Rather -- even though people are depressed you actually see reason for hope so the whole consumer sentiment thing it's a kind of a backward looking metric.
I think it is -- -- I think the consumer confidence is a result of all the other consumer fundamentals and and there's nothing looking really fantastic now but most of those other fundamentals are gradually improving you know that -- the debt ratio that we we've got.
Hooked on a few years ago has been coming down very nicely for the last few years -- consumers are more able to borrow.
Employment gains although not fantastic -- -- -- coming back you know we've we've had -- Pretty substantial job growth in the last six or seven months that's beginning to feed through to incomes.
And then consumers have also built up quite a few backlogs of demand -- -- We if you through all these things together despite all the stresses and strains in the financial markets and in -- and the Arizona particular.
The household sector which remember does account for about two thirds of total spending in the US economy seems to be chugging along fairly nicely.
Right now the interesting thing though is that I really doubt that.
Most people -- middle America follow the Greek crisis over debtor I think and yet the two things that we feel almost instantly our prices at the gas pump.
And what our home would.
Bring more money or lose warm and if we had to sell today and those of the two sticking points but will this cheapest gas in depth helping sentiment in coming months.
Well there -- -- gas prices tend to help improve sentiment in the bottom half of the income distribution those are the folks for whom.
Gasoline purchases are more significant.
Portion of their income and they spent an awful lot of their income so gas prices will certainly help.
Home prices are also moderating in the opposite direction they're declined as it looks like it's just about ending.
And if you know the vestige about 70% of people -- their homes and any improvement in the outlook for home prices is likely help consumer confidence also both of those are positives.
All right thank you Bill Campbell the basic take away guys blocked up.
Where -- too depressed.
Thank you it isn't -- but you know to admit it we're looking at that manufacturing number today you are talking about the fact that you've got manufacturing jobs up -- -- rebel.
That affects company did this deal defeat from the John -- -- benefit.
-- are right.
