Gas Prices Gnaw at Consumer Confidence

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Gas Prices Gnaw at Consumer Confidence
Jun 8, 2007 3:31 AM (4 hrs ago)
By JEANNINE AVERSA, AP


WASHINGTON (Map, News) - Consumer confidence tumbled to a 10-month low as gyrating gasoline prices and persisting problems in the housing market gnawed at people's sense of economic well-being.

The magnitude of the drop shown in the latest RBC Cash Index was surprising given the healthy state of the nation's job market, which is usually an important factor coloring consumers' perceptions of how the economy and their own financial fortunes are faring.

But nagging worries about gasoline prices, if the yearlong housing slump will worsen and drag down home prices further and whether the economy will, in fact, snap out of its sluggish spell, are taking a toll on confidence, economists explained.

"There is too much uncertainty. That is the mindset of consumers right now," said Brian Bethune, economist at Global Insight. "Consumers are kind of in a schizophrenic zone, where the job market is good, they're getting reasonably good pay increases but at the same time they are getting hit with higher gasoline prices and the housing market is still not looking good," Bethune added.

Facing uncertainties, some consumers are feeling angst, watching their budgets more closely and turning cautious, he said.

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That is the gist of the article.

"The magnitude of the drop shown in the latest RBC Cash Index was surprising given the healthy state of the nation's job market."

The healthy state of the nation's job market? Does Jeannine Aversa live in the same America I do? I see people who have lost hope. They take dead end jobs for a week or two then move on to another McJob. They have no hope of getting a descent wage or a steady job. So they move from one meaningless job to another forcing out college kids and high school students. All the mills have closed and the factories are nothing but empty buildings. Wal-mart and the Dollar Store have taken over the consumer market. If you have a diploma, you are over qualified and are likely to be turned down for a job. My daughter, between college semesters, has been looking for a minimum wage job for a month and there is nothing out there.

Are these signs of a healthy job market?