Herman Melville’s last major novel was entitled, “The Confidence Man.” According to Wikipedia:
“The novel's title refers to its central character, an ambiguous figure who sneaks aboard a Mississippi steamboat on April Fool's Day. This stranger attempts to test the confidence of the passengers, whose varied reactions constitute the bulk of the text. In this work Melville is at his best illustrating the human masquerade. Each person including the reader is forced to confront that in which he places his trust.”
The riverboat of the U.S. economy is having its own crisis of confidence in consumer land.
As our sage and savvy U.S. Strategist, Howard Penney, wrote in the Early Look this morning:
“Today we are going to get the preliminary November University of Michigan confidence numbers. The consensus is expecting a slight improvement to a 71.0 reading. A slowing to below the prior reading of 70.6 is more likely.”
Either Penney is clairvoyant or, which is more likely, the fact that he knows the restaurant sector better than most, and thus has an inside look on consumer spending, it came as no surprise that the preliminary Michigan Consumer Confidence reading this morning was a disappointing 66.0, which is a sequential decline from 70.6.
As we’ve outlined in the chart below, the trend in this measure of consumer confidence remains intact and certainly isn’t being helped by low saving rates and accelerating gas prices. We’ve now seen another monthly sequential decline. Confidence is waning, rather unambiguously.
Daryl G. Jones