The Consumer Board released October’s Consumer Confidence Index number today and it was below what anyone was expecting. It fell to 47.7 for the month which is the Board’s second lowest reading since May.

to put the number into perspective; a number higher than 90 means that the economy is doing well and anything above 100 says that there is strong growth in the economy. The lowest that the Consumer Board has ever measured was the record low of 25.3 in February 2009. It only took a few months to climb back up to 53.4 last month.

The reason that consumer confidence is so important is because it is the number that tells how much consumers are spending on items. Because spending on these items accounts for 70% of the United States economy (according to the government), it is an important economic indicator.

So, what does a drop in the consumer confidence index number mean? It shows that consumers have a grim outlook of the future.

According to Lynn Franco, the director of the Conference Board’s Consumer Research Center, “Consumers also remain quite pessimistic about their future earnings, a sentiment that will likely constrain spending during the holidays.”

This news is not welcomed by the retailers in the country. Last year, spending around the holidays fell to levels not seen since the 1960’s. With so many retailers across the United States still hurting and struggling and also going out of business, many of them are counting on this holiday season to prop them up and maybe put them in the black for the year.

The Consumer Board gets the Consumer Confidence Index by sending surveys to 5,000 homes across the country. For October’s numbers, the cutoff date was October 21st.

I honestly think all the figures and indexes like this put people into worry-mode. When people are truly worried about their jobs and their finances they don’t spend. For the past couple of months, people have been worried about their income even with plenty of job security. Jobs aren’t being lost at the rate that they were and there are plenty of places where people are working and not having to worry whether or not their job will be there the next day.

The Consumer Confidence Index was something that we didn’t have before the 60’s and it seems as though the country’s consumer spending was not that bad through the 50’s (after WWII anyway).

What do you think about the Consumer Confidence Index and any of the other financial indexes that come out telling you how the economy is doing? Are there any of these indicators that you follow to tell you how things are going?

I believe I would follow the unemployment numbers a bit more closely than this one.

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It looks like the airlines are at it again. They are really wanting to get any money that they can from you, the flyer, whenever and however they can. They pull dirty, sneaky tricks and expect consumers to just fall for them or accept them as the way it is. However, it kind of is “just the way it is” because I think in the United States, we have become accustomed to being kicked around by the airline industry.

So, what have the airlines done this time? Well, they have decided, all within hours of each other, to start charging an extra $10 per ticket if you decide you want to fly during the busiest travel days of the year.

The $10 charge that the airlines are imposing will be in the form of a “miscellaneous surcharge” that will be added to all the tickets that are for the days of November 29th, January 2nd, and January 3rd. The four airlines that have all decided to go this route are American Airlines, Delta, Northwest, and U.S. Airways.

Of course U.S. Airways has decided to take part in a new kind of charge. This is the same company that keeps increasing its baggage fees and even charges you an extra $5 if you want to check-in your baggage at the desk in the airport. That is outrageous in my honest opinion. When I was in Maryland for my cousin’s wedding in July, I asked my uncle if I could use his computer to print out my check-in information and when I told him that it would cost me an extra $5 if I waited until I got to the airport he looked at me and said, “Wow…that’s outrageous.”

So, when you go shopping for those plane tickets for this holiday season, remember that not only will you be paying extra for checked baggage, but now you also have to consider this new fee. That means when you’re looking at Orbitz or wherever you go to buy your tickets, the price that you’re seeing is not the price that you will pay. In some instances, your ticket will cost $30 or more than what the internet says. At least that is my understand of how this fee will work.
My guess is that the airlines don’t want to give you an upfront quote due to the fact that the lower price they actually see on the website will draw some customers in who are simply looking for the cheapest fare.

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The banks that were supposedly too large to fail last year when the government decided to bail out crumbling banks are now bigger than they were just a year ago. Even with measures in place to try to keep banks from getting too large, somehow these banks have gotten bigger and continue to grow.

J.P. Morgan Chase holds more than $1 out of every single $10 deposit made in the United States. Big surprise, so does Bank of America and Wells Fargo. Along with Citigroup, these banks issue half of the mortgages in the country and two out of every three credit cards.

FDIC chairman Sheila C. Bair has said regarding the weight of the banks on the financial system, “It is at the top of the list of things that need to be fixed. It fed the crisis and it has gotten worse because of the crisis.”

A few problems with these banks being bigger than they once were is that:
1) Consumers will have less choice when it comes to banking services and these banks will likely take advantage of that situation.
2) The bigger the bank, the more likely it is to think that the government will prop it up if things start to go south. This could lead to more risky moves on the banks’ parts.
3) The government’s stakes in these companies is large, but it still does not have voting shares.

Of course, this all came about due to banks failing or otherwise being “too good of a deal to pass up.” Meaning, that banks like Wachovia were simply too cheap with too large of a customer base to not purchase. That’s what Wells Fargo did, and that’s what has been happening all across the banking industry. However, it does seem a bit counter productive when you start to think about it.

These banks were once too large to fail and nothing has changed it seems. The only difference is that every dollar banks are lending is being scrutinized and those who want to borrow money to buy homes or other things are also being scrutinized as hard as the banks are in some situations.

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