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Economy in Brief

Consumer Confidence Plummet, Expectations the Dreariest
by Tom Moeller  February 26, 2008

The Conference Board reported today that consumer confidence plummeted this month. The 14.1% m/m decline to a reading of 75.0 was the largest m/m give back since September of 2005 and it dropped the level to its lowest since early 2003. A consensus of economists foresaw less of a decline to a level of 82.

A decline in the expectations component accounted for much of last month's decline in overall confidence. The 16.5% m/m drop followed an 8.6% January decline and lowered the expectations component to its lowest since early 1991. Expectations for business conditions dropped to a 36 year low while expectations for employment dropped to the lowest since 1980.

Respondents planning to buy an automobile within the next six months plummeted but plans to buy an appliance rose.

The present conditions index fell a somewhat lesser 12.0% m/m to the lowest level since late 2004. Just 18.5% of respondents saw business conditions as good, near the least since 2004. Jobs as plentiful were seen by 18.6% while 23.8% saw them as hard to get.

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

Conference Board  (SA, 1985=100) February January Y/Y 2007 2006 2005
Consumer Confidence Index 75.0 87.3 -32.6% 103.4 105.9 100.3
  Present Conditions 100.6 114.3 -26.6% 128.8 130.2 116.1
  Expectations -- -- -- -- -- --
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