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Economy in Brief

Consumer Confidence Fell Sharply
by Tom Moeller August 31, 2004

The Conference Board’s August Index of Consumer Confidence tumbled 7.1% to 98.2 following a downwardly revised 2.8% July gain. Consensus expectations had been for a more moderate decline to 103.0.

During the last twenty years there has been a 50% correlation between consumer confidence and the y/y change in real consumer spending.

The index of consumer expectations fell 8.3% (+1.8% y/y), reversing nearly all of the prior two months' strong gains. The present situation index also fell a sharp 5.4% (+62.4% y/y).

Jobs were viewed as hard to get by 25.8% of respondents versus 25.7% in July. The percentage of respondents expecting more jobs in six months fell to 16.2%, below 16.8% last year and 18.3% in 2002.

The Conference Board’s survey isconducted by a mailed questionnaire to 5,000 households and about 3,500 typically respond.

Conference Board August July Y/Y 2003 2002 2001
Consumer Confidence 98.2 105.6 20.2% 79.8 96.6 106.6
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