Consumer confidence drops to lowest level in 7 months; German confidence is strong
In another release, German consumer and business confidence rose to 4.9 points from 4.3 points for September.
This should not be a real surprise to anyone. The consumer sentiment is grim in the US as there are no real sign of the gloom dissappearing. The real news is that the sentiment is getting worse. In fact, its the lowest as it has been since February. The number of consumers calling business conditions "bad" outweighed those saying conditions are "good" by nearly 6 to 1. Similarly, those saying jobs are "hard to get" far outnumbered those saying jobs are "plentiful."
This is in stark contrast to what is happening in Germany. They are actually creating jobs and consumer sentiment in Germany is on a three year high. Their unemployed numbers may fall below 3 million or 7.2%.
The difference between the two countries is spending. The US is in the business of growing government. Spending is increasing by unprecidented amounts. On the other hand, Germany is cutting spending.
Germany has approved cuts in military, health care and welfare spending. They have reduced gov't employees by 15,000 or roughly 5% and slashed their salaries by 2.5 per cent. They have aslo abolished tax preferences and subsidies. The government intends to save up to 11.2 billion euros next year and about 19.1 billion euros in 2012.
Their Reverse-Stimulus is worth over 30 billion dollars for a country that is almost one quarter of the size of the US. And they are the country that is growing and creating jobs. Is someone listening?