Imagine that: Main Street is "Out of Sync" with Wall Street

Title: Consumer Confidence Out of Sync With U.S. Stock Gains Since ‘09
Bloomberg
http://noir.bloomberg.com/apps/news?pid=20603037&sid=aExkQGJ5ju0w

-------------
The Bloomberg Consumer Comfort Index has stalled near its recession average as the Dow Jones Industrial Average has risen 83 percent from a 12-year low in March 2009. A tight correlation between the index and Dow that lasted more than two decades has broken down as joblessness above 9 percent, stagnant wages and near $4-a-gallon gasoline outweigh the benefits of higher share prices, even after a 6.6 percent retreat in the Dow since the end of April.

“Consumers are fairly depressed, yet the stock market continues to improve,” Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia, said in an interview. “It’s foreign demand that is really pushing corporate profitability. Consumer confidence is pretty constrained by the labor market.”

U.S. manufacturers in particular have profited from faster growth in emerging economies, including Colombia and Indonesia, where expanding middle classes are demanding more roads and utilities, as well as higher-protein foods and more consumer goods. Deere & Co., the world’s largest farm-equipment maker, raised its fiscal 2011 earnings forecast on May 18 to $2.65 billion from $2.5 billion, citing increased demand for farm and construction machinery outside the U.S, along with growth in America.

...

U.S. corporations have gotten “a pickup in sales growth, but they’re not responding with a big pickup in wages and labor growth,” said Rob Carnell, chief international economist at ING Bank in London. “This is helping them to keep their margins intact in the backdrop of rising commodity prices.”
----------------

No real surprises--foreign demand is helping companies' bottom lines. Companies are then playing conservative with hiring trying to eek out the most profit with streamlined staffing--until the need for more people affects profit potential, hiring will lag (Always a lagging indicator, though this economic downturn has the lag much more severe than the normal 6 month timespan).

In the gilded age, this happend also. In particular, industry was actually killing people through unsafe working conditions and unsafe products. At that time, people on main street had a great resentment of the power that Wall Street and London financial markets exerted over their lives. Now, Fraud Street power almost completely controls not only Washington but also controls state governments. They are calling the shots in education and health care. This is a terrible situation.