Consumer Confidence Hits Record Low But Are Things Really that Bad?

The media are reporting about fresh lows in consumer confidence.

U.S. consumer confidence plunges again in June - Marketwatch

Consumer Confidence Tumbles to 16 Year Low - CNBC

But are things really so bad? The Washington Post recently ran an article by Neil Irwin entitled Why We're Gloomier than the Economy. It asserts that:

"But the reality is different. According to most broad measures of how the economy is doing, it's not all that grim. Soft? You betcha. In recession? Quite possibly. And a crisis in the financial markets has rattled nerves for months now. But so far, the economy is holding up better than it did during the last two recessions in 1990 and 2001. Employers haven't shed as many jobs, the unemployment rate is still relatively low, and gross domestic product has kept rising. Things are nowhere near as bad as they were in the Great Depression, or even during the severe recession of 1982-83. The last time consumers were this miserable, in May 1980, the jobless rate was 7.5 percent and inflation was 14.4 percent. Now those numbers are 5.5 percent and 4.2 percent respectively."

The article goes on to say that we feel worse than we should because the impact of this recession is hitting everyone. In recessions with high unemployment if you lost your job, you were in bad shape, but if you didn't, it didn't feel like much of a recession. And in past recessions only 7% of people were unemployed, meaning that 93% of people were working and didn't feel like there was a recession at all.

In this recession it's a shared pain. We all drive and feel the pinch of higher gas prices. And we all own homes and can see the equity declining.

But as the numbers go, the pain is still mild compared to other downturns. At least for now.