NEW YORK (AP) -- This is a midyear report card with only one entry, that being the overall conduct of consumers. They can't seem to shake the evaporation of their big dreams. They are apprehensive, distrustful.
At least that's the report from the classroom, where the instructors point to six interest-rate cuts and a coming tax rebate, and say consumers should be showing more pep and confidence rather than biding their time.
Hold on. Biding their time? These consumers have pushed housing and car sales to some of the highest levels ever. While they've been hurt badly, consumers haven't lost their common sense and appreciation of bargains -- real bargains, that is, not those of the stock market variety.
But otherwise, the instructors are correct. If consumers were sure of themselves, you'd see more buying at stores, higher attendance at resorts and theme parks, more action in the stock market.
But people are watching their dollars. Just as they expected easy stock market killings last year, they now want outright steals. Super-bargains or else. Indeed, the latest University of Michigan survey indicates consumers in June wanted car companies to offer ever larger discounts on prices and interest rates.
Tightfistedness was evident throughout the Michigan survey, which found that while June was the year's strongest consumer-confidence month, it ''was only slightly more positive than during the prior four months.''
It isn't that consumers don't see hope. Surveys show they do, but later, not right now. For the time being they are on hold, just dreaming of a return to better times. They told the Michigan surveyors that the recovery will be ''slow and uneven,'' and that unemployment will grow.
This is in spite of efforts by the White House and Congress to spur activity with a tax rebate, and a Federal Reserve aggressiveness in lowering interest rates unmatched in nearly two decades.
Seeking an explanation, Jim Griffin, economist at Aeltus Investment Management, suggests that institutional changes in finance have created slippage between ''the Fed's crankshaft and the economy's driveshaft.''
But maybe the explanation isn't that complex. Maybe the slippage is between the confidence of officials and that of consumers.
The consumer is hauling around a lot of emotional baggage from events of the past year. Seldom have the high hopes of masses of people been so blasted; in but a few weeks, fear displaced unrestrained optimism.
More than $4 trillion in market valuations disappeared, including the first-ever investments in stocks by many thousands of ordinary people with dreams of leveraging their lifestyles. Within a month, and after the fact, the same ''experts'' who had whipped up enthusiasm were warning of dangers.
With such leadership, it isn't difficult to understand why consumers might become suspicious and even cynical, especially about those with a bloated sense of expertise about stocks and the economy.
Consumers too often defer to the thinking of experts rather than trusting their own, more sensible and conservative instincts. Having learned a lesson, they now aren't in a mood to rush into anything.
It probably explains why they aren't in a rush to respond with that old-time enthusiasm to the efforts of the White House, Congress, the Fed and all the king's horses and all the king's men. They've learned that too much enthusiam and too much trust can get you into trouble again.
End advance for release Sunday, July 8
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