Two sides of the same story

by SixFigureStart | September 25, 2009

  • My Vault
Consumers and Washington-area employers, in two recent surveys, were asked how optimistic they felt. And, owing to two different sets of concerns, the studies produced quite dissimilar results. Between August and September, the index of consumer expectations in the Reuters/University of Michigan poll rose from 65.0 to 73.5, its highest level in two years. (The methodology is a bit convoluted, but the mathematically gifted can pore over the formula here; just click on the 'Select' button at bottom.) Evidently, this indicates that men and women are feeling markedly better about both current conditions and the future.

On the employers' side, the main readings were somewhat skewed since last year's tally was taken in August, a month or so before the financial storm really kicked in. But the Human Resource Association for the National Capital Area reports that even at this point in the game, with Secretary Bernanke assuring us that the recession is "very likely" (but not definitely!) over, between 40% and 50% of those companies surveyed still expected to freeze salaries and/or limit increases in 2010.

But everything is connected, right? If employers go ahead and make further cuts to wages and bonuses -- or heaven forbid, employee counts -- next year, will that drive the consumer index downward? Or will rising consumer sentiment finally bring about some decent spending and force a bit of a smile from employers? We sure don't know, but watch this space for the answers to these and other questions…

--Posted by Todd Obolsky, Vault Staff Writer

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