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Economy in Brief

Consumer Confidence Stayed Low
by Tom Moeller January 29, 2008

The Conference Board reported today that consumer confidence gave back about all of its December gain. The level fell 3.0% in January to a reading of 87.9. The decline was slightly less than had been expected by economists but it was to a point near the low of last year.

A decline in the expectations component accounted for all of last month's decline with an 8.2% m/m drop. Expectations for employment (more jobs) and for business conditions deteriorated.

The percentage of respondents planning to buy an existing home fell but those planning to buy a new home rose to the highest in four months. Those planning to buy a major appliance rose to the highest level since August.

Respondents planning to buy an automobile within the next six months rose sharply

The present conditions index rose 2.1% and that made up just a small piece of the declines during the last nine months of 2007. Just 20.7% of respondents saw business conditions as good, near the least since 2004, but a slightly greater 23.9% saw jobs as plentiful.

The expected inflation rate in twelve months fell m/m to 5.3% but that still was up from the 5.1% expected rate during 2006 and 2007.

Conference Board
 (SA, 1985=100)
January December Y/Y 2007 2006 2005
Consumer Confidence Index 87.9 90.6 -20.2% 103.4 105.9 100.3
  Present Conditions 115.3 112.9 -13.9% 128.8 130.2 116.1
  Expectations 69.6 75.8 -26.3% 86.4 89.7 89.7
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