Ed Driscoll

Has Obama Lost Control of Economic Expectations — Again?

James Pethokoukis has your scary-ass chart of the day and writes:

Tell me what U.S. consumers are thinking, Reuters:

Americans felt worse about their personal finances in early February, even as they saw a light at the end of the tunnel for the jobs market, a survey released on Friday showed. The Thomson Reuters/University of Michigan overall index of consumer sentiment fell to 72.5 in early February from January’s 75.0, which was the highest level since February 2011. The latest figure fell short of the median forecast of 74.5 among economists polled by Reuters. ”This pattern of responses – less favorable current assessments and more favorable prospects – is not surprising. It simply indicates that consumers find their current situation all the harder to bear when improvement is finally in sight,” said survey director Richard Curtin said in a statement.

When you drill down into these numbers, you find out two things. First, consumers are still pretty dour. Most of the drop in the index was caused by a decline in the current conditions index, which came in at 79.6 vs.  84.2 previously. Indeed, 45 percent of respondents said they were worse off financially than a year ago, up from 41 percent in January and 39 percent in February 2011.

Second, the drop would have been much worse if not for much greater optimism about the job market, with 34 percent of respondents saying they’ve been hearing good things about employment. This, Barclays Capital notes, was the highest percentage in the history of the survey. And 32 percent said that they expected better business conditions a year from now, which was the highest reading since May. Finally, 31 percent expected lower unemployment levels in the next 12 months, which was the largest percentage since 1984.

So people think today stinks, but tomorrow will be way better.

Read the whole thing.