In October, the Conference Board’s Consumer Confidence expectations index plunged deep into recessionary territory. The index has only been lower twice in its more than four decade history. Both episodes were associated with deep recessions. Why are consumers forecasting recession? Wasn’t October the best month in stocks in almost two decades? Maybe low consumer confidence has something to do with income. In the third quarter, real personal income excluding transfer payments fell for the first time since the recovery began. So we have millions who are scraping by with unemployment benefits and those who are working are seeing their incomes fall. That doesn’t bode well for future economic growth.
