US unemployment figures are often watched with bated breath. The American consumer was a big engine for the global economy until 2008. Since then, unemployment and spending curbs have kept the US, and the world economy, on tenterhooks.
That has changed a bit: latest data shows that US unemployment rate has fallen to a two-year low of 8.8% in February. The unemployment rate has fallen for four months in a row now. These have been viewed as green shoots of spending.
They are hardly that. Consumer sentiment indices such as the University of Michigan’s (UMich) consumer sentiment index and Conference Board Survey continue to be in the dumps. The UMich index hit a five-month low in late March. Spending, after excluding food and fuel, remains as sclerotic as before.
It will be a while before this source of growth revives again. The world ought to look elsewhere.