Consumer confidence is now the lowest it has been since 2009 according to Gallup. The poll found an incredible 69 percent of the American people think the economy is getting worse.
The percentage of Americans saying the U.S. economy is getting better dropped to 26% last week. This is the lowest level for this measure since March 2009. More than two-thirds of Americans now say the U.S. economy is getting worse — a two-year high.
The biggest issue with the economy now is the lack of demand. If people think the economy is getting worse, they are less likely to go out and buy new goods and services. This causes businesses to reduce their hiring and pay, which in turn further erodes consumer confidence.
This lack of demand could be fixed if the government picked up the slack, but with Obama in full blown austerity mode right now there is scant hope of more stimulus. If anything, we are likely to get cuts that will make this problem even worse.
This is a serious problem for President Obama’s re-election prospects. It is more evidence we are not going to see strong job growth between now and November 2012. It is hard to imagine with jobs and the economy the dominating issues among the American people that Obama can win re-election if, as it looks possible, official unemployment is still well over 8 percent by election day.