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Economy in Brief

Consumer Confidence Slipped Again
by Tom Moeller November 28, 2006

The Conference Board reported that November consumer confidence fell 2.1% to 102.9 following a downwardly revised 0.8% slip during October. The decline ran counter to Consensus expectations for an increase to 106.4.

During the last twenty years there has been a 52% correlation between the level of consumer confidence and the y/y change in real consumer spending. The correlation rose to 66% during the last ten years.

Consumers' assessment of the present situation fell 1.2% (+9.2% y/y) for the second consecutive monthly drop. The percentage of respondents who viewed business conditions as good (26.5%) fell but the percentage that viewed jobs as hard to get (22.4%) rose to the highest level this year.

The index measuring consumers' expectations fell for the first month in the last three (+0.9% y/y). Expectations of better business conditions in six months fell hard to the lowest level in over a year.

The expected inflation rate in twelve months fell to 4.7%, the lowest since July of 2005.

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

The Economic Outlook, today's remarks by Fed Chairman Ben S. Bernanke, are available here.

Conference Board November October Y/Y 2005 2004 2003
Consumer Confidence 102.9 105.1 4.7% 100.3 96.1 79.8
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