Consumer Confidential: Confidence drops, food prices to soar, teens get smart
--Consumers just can't get a fix on how they feel about the economy. Last week came word that we're feeling a bit more upbeat. Now comes the Conference Board's Consumer Confidence Index falling to 60.8, a sign of the toll that high gas prices, a choppy job outlook and a moribund housing market are taking on people's psyches. Economists had expected an increase to 67 for May, but this was the lowest reading since November. The index is far from the reading of 90 that indicates a healthy economy. It hasn't approached that level since the recession began in December 2007. This is a big deal because consumer spending accounts for about 70% of U.S. economic activity and is critical for a strong rebound.
--Need another reason to feel gloomy? The nonprofit organization Oxfam is predicting that within 20 years, the cost of crops could increase by up to 180%. "The food system is pretty well bust in the world," Oxfam CEO Barbara Stocking tells reporters. "All the signs are that the number of people going hungry is going up." She calls for changes in the food system to cope with climate change, higher food costs and a scarcity of land and water. Oxfam says food prices will increase by something in the range of 70% to 90% by 2030 before taking into account the effects of climate change, which would roughly double price rises again. Although wheat prices have remained stable in 2011, they are 70% higher than a year ago. Prices for corn have more than doubled in the last 12 months.
--A silver lining: Times may be tough, but at least young people are learning to cope. According to a new survey from brokerage Charles Schwab, nine out of 10 teenagers say they were "affected by the recession." Those surveyed say the economic crisis has caused a major shift in their perspective that includes a greater appreciation for what they have and an increased awareness of financial hardship. The recession also taught teenagers to not be so materialistic. Nearly two-thirds (64%) say they are more grateful for what they have, the majority (58%) report they are less likely to ask for things they want and 56% say they now have a greater appreciation for their parents’ hard work. That's something.
-- David Lazarus
Photo: Consumers (OK, maybe not these two) are feeling down about the economy. Credit: Associated Press