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Consumer confidence has taken a hit in recent months because of stagnant wages and growing unemployment, two factors that have raised worries that consumers will cut back spending in the coming months.

Analysts also worry that consumers will grow reliant on government programs, holding onto their money when no such programs are available.

These figures have caused analysts to predict that consumers will spend less aggressively going into the holiday season, which may prove to be disastrous for retailers that rely on strong holiday sales to get through the rest of the year. However, inflation did not rise as much as expected, which is a relief to policymakers.

Post from: EveryJoe

Consumer Spending Fell in September

Read my take, and share your own, on my post about President Bush and the economic crisis.

Post from: EveryJoe

This Morning’s Speeches from President Bush and Secretary Paulson

“Pivotal moment.”

Really? What will we do? Will we change the way we do things? Perhaps abandon an economy that is so based on debt and consumption?

“Free enterprise” and “only when necessary”

Apparently there is no “free enterprise.” It’s all about socializing the risk associated with massive private profits and decisions. Decisions made mostly upon greed.

“Address the root cause”

No, no, no, no, no! The root cause is not the fall of the housing market. It’s the policies and the lending practices that led to the approval of people who could not afford mortgages. It includes the sort of things like credit derivatives that did not allow for transparency, and encouraged the sort of behavior that led to the housing market crash.

The root cause is, in fact, the policies and practices that have betrayed the people and created all sorts of problems.

“Vast majority assets purchased have good value over time”

Um, right. I hope so. Because I don’t know how long we’ll all be paying mortgages in this climate, thanks to inflation and recession and stagnant wages. And we’ll see if it gets paid back. But this means a big risk. And a big deficit.

“Dry up loans…risks cannot afford to take”

Oh yes, please. Because an economy based on “regular” Americans being debt has been working out so well. The last thing we need is more loans.

“Confidence”

I hear: Smoke and mirrors. We’re supposed to be buoyed up by confidence. And he’s doing a great job of trying to make us feel good. It is good that he’s trying to instill confidence. At the same time, though, “confidence” isn’t the same as solid solutions.

I do like the idea of insuring money market accounts. You know, for the rest of us savers — the ones who haven’t been making rash and risky decisions based on greed.

“Work with Democrats and Republicans alike”

We’ll see how that goes…How long before this becomes a wedge issue?

What did you think of President Bush’s speech? I’d love your comments.

Post from: EveryJoe

President Bush Addresses the Economic Crisis