The U.S. economy is becoming the little engine that couldn’t.
You, of course, remember the children’s story in which self-confidence and determination pull the little engine up and over a steep hill. Unfortunately, after four years of struggling to gain momentum, even the little engine would likely become discouraged.
So it is with the American consumer. The Consumer Confidence Index for June 2012 slipped for the fourth consecutive month for the first time since May 2008, dropping from 64.4 to 62.0 (63.0 was expected).
In addition, the Richmond Fed Manufacturing Survey dropped from +4 to -3 (a+2 was expected), its lowest number since October 2011. Survey results can range from +100 to -100, with positive numbers indicating expansion and negative numbers indicating contraction.
In addition, the Bureau of Economic Analysis (BEA) announced its third estimate of gross domestic product (GDP) for the first quarter of 2012, but left the annualized rate at just 1.88%, a percentage point below the growth rate for the fourth quarter of 2011.
The U.S. economy may not be in a recession, but it’s sure not feeling like an expansion, either.