Even as the S&P 500 Index remains at its highest level since October, Gallup’s key economic measures don’t find Main Street keeping up. During the week ending Aug. 23, consumer confidence fell, self-reported average daily spending gave up what it gained during the prior week, and job creation was unchanged. Whatever is driving Wall Street doesn’t seem to be inspiring American consumers, nor is it increasing jobs or spending, as both remain well behind their year-ago levels.
When the July unemployment number came out, I initially thought the one-tenth-of-one-percent decline in unemployment was going to help Obama – even though, as I noted, the total number of Americans who are employed decreased, and the total number of Americans who have given up looking for work has increased dramatically. But I suspect that one of the most damaging ways to appear out of touch with the American public is to claim that the economy is doing well when people don’t feel that it is – remember how much hay Obama made out of John McCain’s “the fundamentals of our economy are strong.”
So look at the president’s rhetoric on the economy lately: “We are pointed in the right direction.” “This month’s jobs numbers are a sign that we’ve begun to put the brakes on this recession.” Today, in the Bernanke statement: “This ‘bold, persistent experimentation’ has brought our economy back from the brink. They are steps that are working.”
There are quite a few economists who think last month’s decline was a statistical blip, and unemployment will still peak around 10 percent; even the White House is still saying that’s a possibility. If the president says “things are getting better” while unemployment continues to climb and people don’t feel their circumstances getting better, that trust will erode like shoreline in a hurricane.