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Economy in Brief

Consumer Confidence Ticked Up During July
by Tom Moeller July 29, 2008

Consumer confidence, as reported by the Conference Board, ticked up this month by 1.8% after having dropped a revised 12.2% m/m during June. The rise contrasted with Consensus expectations for a moderate decline and it was the first monthly increase this year.

The present conditions index was roughly unchanged from June and remained near the lowest level since 2003.

A slightly improved 13.1% of respondents saw business conditions as good but that remained near the lowest since early-2003. Jobs as plentiful were seen by a new low, since 2003, of 13.5% while 30.3% felt that jobs were hard to get. That was the highest since early-2004.

The expectations component of the index ticked up 3.9% and recovered part of the prior month's 12.5% decline.

The percentage of respondents expecting business conditions to worsen in six months slipped to 32.4% and the percentage expecting income to decline was roughly unchanged at 16.0%. Just 8.2% of respondents expected more jobs while 37.1% expected fewer jobs. Only 27.7% of respondents planned to buy a major appliance within six months. That was the lowest since late last year.

Expectations for the inflation rate slipped last month to 7.6% but that was near the highest level in the series' 20 year history.

Consumer Confidence Surveys: Can They Help Us Forecast Consumer Spending in Real Time? is a 2006 article from the Federal Reserve Bank of Philadelphia. It answers "no" and it is available here.

Conference Board  (SA, 1985=100) July June Y/Y % 2007 2006 2005
Consumer Confidence Index 51.9 51.0 -53.6 103.4 105.9 100.3
  Present Situation 65.3 65.4 -52.8 128.8 130.2 116.1
  Expectations 43.0 41.4 -54.4 86.4 89.7 89.7
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