Consumer Credit Drops as US Economy Falters

Government interference in the marketplace has hidden the true weakness of the U.S. economy, and the release of the census workers from their temporary jobs, underscored the reality of the ongoing recession, as 131,000 workers were laid off.

The so-called jobless recovery that never was, has caused consumer credit to drop for the fifth month in a row, this time by 0.7 percent in June, or $1.3 billion.

In April U.S. consumer credit plunged 6.4 percent, and in May it dropped another 2.6 percent.

The lack of job creation in the private sector continues to be the impetus behind consumers pulling back on going into debt, and there is nothing in the short term that indicates this will change; as a matter a fact it'll probably get a lot worse before it begins to turn around.

Picking and choosing the economy data to focus on no longer cuts it, as even at that it brought mixed outlooks, while those that understood knew it was far from mixed, but an outright sham as far as cherry picking what the media chose to emphasize when they reported.

Not only are payrolls weak, but the housing market is almost assuredly going to go into recession again, debt levels remain high, and we haven't even heard much lately about the projected disaster of commercial real estate for the second half of 2010, which could begin at any time, as far as focusing on the issue.

With a job market that could take years to turn around, and the same with housing and commercial real estate, one does have to ask what the optimism is all about.

I think we're going to find out the economic optimism is much ado about nothing.

Consumer Sentiment Drops to 11-Month Low

A survey conducted by Thomson Reuters/University of Michigan named Thomson Reuters/University of Michigan's Surveys of Consumers, found consumer sentiment has fallen to its lowest level in almost a year.

This is an extraordinary turn of events over just a month, as last month the highest level of consumer sentiment had been reached in almost 2-1/2 years. When it is built more on wishful thinking and hope rather than realities of the economy, these types of huge swings can happen quickly, and it of course now has.

In June the numbers were at 76.0, while in July the plunged to 66.5. Economists had been looking for 74.5.

Director of the surveys, Richard Curtin said this, "Income and job prospects were extraordinarily weak and those bleak prospects have made consumers much more cautious spenders."

After the Democrat-controlled Congress stopped their irresponsible spending spree, the reality the economy wasn't growing but was rather being artificially propped up is setting in, and consumers are understanding we've never left the recession, and there hasn't been a recovery.

Consumers also said in the surveys that they aren't going to be buying any big ticket items like automobiles in the foreseeable future, showing again the hype about a recovery was largely reported by the mainstream media as a reality to prop up Obama and the Democrats, rather than hard reporting on the fact that we're still in a recession.